Rwanda Burundi

COUNTRY REPORT

Rwanda Burundi

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3rd quarter 1999

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ISSN 1465-6418

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Printed and distributed by Redhouse Press Ltd, Unit 151, Dartford Trade Park, Dartford, Kent DA1 1QB, UK Contents

3 Summary

Rwanda

5 Political structure 6 Economic structure 7 Outlook for 1999-2000 11 Review 11 The political scene 15 Health 16 The economy 17 Agriculture 17 Foreign trade and payments

Burundi

19 Political structure 20 Economic structure 21 Outlook for 1999-2000 24 Review 24 The political scene 29 The economy 30 Agriculture

33 Quarterly indicators and trade data

List of tables

10 Rwanda: forecast summary 23 Burundi: forecast summary 33 Rwanda: quarterly indicators of economic activity 33 Burundi: quarterly indicators of economic activity 34 Rwanda: foreign trade 35 Burundi: foreign trade

List of figures

10 Rwanda: gross domestic product 10 Rwanda: exchange rate 23 Burundi: gross domestic product 23 Burundi: exchange rate

EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 . 3

August 20th 1999 Summary

3rd quarter 1999

Rwanda Outlook for 1999-2000: Donors will give tacit their approval to the RPF’s transition programme. The recently appointed foreign minister will face limitations in his new job, while the parliamentary discipline committee will continue unchecked. Rwanda will be keen to disarm Palir militia in Congo, and prospects for Palir inside Rwanda are grim. The Rwandan-supported Congo rebel faction may try to capture Mbuji-Mayi. Construction of the planned railway to Tanzania will take time. Real GDP growth is expected to remain strong in 1999, at 8%, falling back slightly, to 6%, next year. The next stage of the coffee sector’s liberalisation will dampen incentives for producers. A new debt-relief deal is expected to be worth $25m-35m per year.

Review: The political transition under the RPF has continued. The foreign affairs minister has been sacked, while more parliamentarians have been removed by a special committee. The Rwandan Human Rights Commission has been elected, and a test case is for Rwandan press freedom is pending. The RPA has continued to fight in Congo, while the Lusaka peace talks have commited regional states to disarming Palir. Rwanda has backed Emile Ilunga’s rebel RCD faction—which has not signed the ceasefire agreement. A new Supreme Court has been named. Rwandan courts have sentenced fewer people to death for genocidal crimes, although more have been found guilty at the ICTR in Arusha, and more countries have agreed to imprison those convicted by the ICTR. The former Swedish prime minister Ingvar Carlsson is to head the UN’s own genocide probe. The Great Lakes initiative against AIDS is to be based in Kigali. Electrogaz’s water and energy components have been separated, and Shell has finally acquired the assets of the state oil company, Petrorwanda. Three new commercial banks are to be set up. The Virunga national park has been reopened. RPA-linked companies are allegedly selling Congolese minerals. Swift action has minimised the threat posed to agriculture by worms, and higher producer prices have boosted the coffee crop. Rwanda stands to receive major debt relief, and the EU has resumed aid to the country.

Burundi Outlook for 1999-2000: The five-year timetable for the transition to civilian rule could well slip. The success of the transition will hinge on reform of the military. Frodebu seems to be finding it increasingly difficult to govern on its own. President Buyoya will be tempted to talk directly to the CNDD-FDD rebel faction. Burundi’s soldiers in Congo will probably retreat closer to the border. Substantial balance-of-payments from donors support may not be forthcoming this year, and this could have dire consequences for Burundi’s economy and increase unemployment. Adverse weather conditions and political insecurity are likely to hamper agricultural production.

Review: The indications are that President Buyoya is planning to remain in power for at least five years. Schisms have emerged in the negotiating teams at the all-party Arusha conference, and the fifth round of talks was delayed. The CNDD-FDD is still excluded from Arusha and has requested direct talks with

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the government. Divisions have appeared within Frodebu. The civil war has intensified once again. Burundi has committed itself to the ceasefire in Congo. A new penal code has been adopted, and the chief prosecutor has initiated reforms to the justice system. The government has clamped down on the press. Tax receipts were lower than expected in the first half of 1999. There have been more fuel shortages, and the currency has depreciated further. Doubts have grown about Andover’s ability to finance the development of Musongati. The Kayenzi hydroelectric dam has run out of water, while poor rains and army worms have threatened harvests. The government has provided fresh credit to agricultural producers.

Editor: Noah Beckwith All queries: Tel: (44.20) 7830 1007 Fax: (44.20) 7830 1023 Next report: Our next Country Report will be published in November

EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 Rwanda 5

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 17th 1994

National government Self-appointed in July 1994; consists of ministers from the RPF, MDR, PSD, PL and PCD; last reshuffle February 1999

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

President Pasteur Bizimungu (RPF) Prime minister Pierre-Célestin Rwigyema (MDR) Vice-president, minister of defence & national security Paul Kagame (RPF)

Key ministers Agriculture, animal resources & forestry Ephraim Kabaija (RPF) Commerce, industry & tourism Marc Rugenera (PSD) Communications Charles Ntakirutinka (PSD) Education Emmanuel Mudidi (RPF) Energy, water & natural resources Bonaventure Niyibizi (independent) Finance & economic planning Donald Kaberuka (independent) Foreign affairs & regional co-operation Augustin Iyamuremye (PSD) Health Ezechias Rwabuhihi (RPF) Information vacant Interior & community development Abdulkarim Harelimana (RPF) Justice Jean de Dieu Mucyo (independent) Lands, human resettlement & environmental protection Joseph Nsengimana (PL) Local government Desire Nyandwi (PSD) President’s office Patrick Mazimhaka (RPF) Public works, transport & communications Vincent Biruta (PSD) Public service & labour Jean Damascene Nayinzira (PCD) Social affairs Charles Ntakirutinka (PSD) Youth, culture & sports François Ngarambe (RPF)

Central bank governor François Mutemberezi

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Economic structure

Latest available figures

Economic indicators 1994 1995 1996 1997a 1998a GDP at market prices (Rwfr bn) 165.1 347.7 427.0 561.6 651.6 Real GDP growth (%) –49.0 24.6 11.8 13.0 10.5 Consumer price inflation (av; %) 64.0 22.0 9.0 7.4 10.0 Population (m) 5.80 5.95 6.20 7.80 8.08 Exports fob ($ m) 42.2 56.7 61.7 93.2 82.1 Imports fob ($ m) 480.6 219.1 218.5 245.6 235.9 Current-account balance ($ m) –60.4 57.5 –7.1 –92.7 –120.0 Reserves excl gold (year-end; $ m) 32.0 125.8 154.8 153.3b 168.8b Total external debt (year-end; $ m) 1,038 1,064 1,111 1,164 1,200 External debt-service ratio, paid (%) 11.6 20.8 20.4 42.0 35.0 Green coffee productionc (‘000 tonnes) 13.1 15.1 21.1 14.8 13.0 Exchange rate (av; Rwfr:$) 150.0a 262.2 306.8 301.5b 312.3b

July 20th 1999 Rwfr336.54:$1

Origins of gross domestic product 1997 % of total Components of gross domestic product 1997 % of total Agriculture 35.7 Private consumption 94.5 Industry 23.9 Public consumption 8.9 Services 40.1 Gross fixed capital formation 15.0 Others (incl import taxes) 0.3 Exports of goods & services 5.9 Total 100.0 Imports of goods & services –24.3 GDP at market prices 100.0

Principal exports 1997 $ m Principal imports cif 1997 $ m Coffee 45.2 Intermediate goods 70.4 Tea 20.7 Capital goods 63.1 Hides 4.6 Food 55.1 Cassiterite (tin ore) 3.7 Energy 31.2

Main destinations of exports 1997d % of total Main origins of imports 1997d % of total Belgium-Luxembourg 36.1 Tanzania 14.8 Germany 20.6 Kenya 14.0 Netherlands 4.1 US 11.1 UK 2.0 Belgium-Luxembourg 8.3 Us 1.0 Germany 5.1 a EIU estimates based on IMF, World Bank and national data. b Actual. c Crop years (April-March) starting in year stated. d Based on partners’ trade returns; subject to a wide margin of error.

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Outlook for 1999-2000

Donors will give their tacit The decision of the Assemblée nationale (parliament) to extend the process of approval to the RPF’s political transition, and therefore its own mandate, by another five years, transition programme comes as little surprise. The Rwandan government has hinted ever since it came to power in 1994 that it might need more than five years to “normalise” Rwanda, and its argument that Rwanda is a special case that must be handled carefully seems to have been accepted by the country’s major donors. Consequently, donors will not query the extension of the transition or suspend aid, particularly since parliament’s decision was cleverly presented as the result of cross-party consensus, rather than as a dictat of the ruling Rwandan Patriotic Front (RPF). It remains to be seen whether the 2003 deadline for the transition will be respected, although the next five years should provide ample time to organise elections at communal and then prefectural levels, paving the way for a general election. The issue of when to allow party politics into the electoral process, if at all, will prove particularly difficult. The RPF’s view is that party politics will necessarily remain ethnically divisive in Rwanda; however, it is aware that it must be perceived to be committed to multiparty politics. A Ugandan-style referendum on multi- partyism may provide a solution to the dilemma, though a free vote would probably endorse party political elections, and this in turn would weaken the RPF’s hold on power.

The role of the foreign If the new foreign affairs minister, Augustin Iyamuremye, wishes to retain his minister will be limited post for long, he will have to accept the task of presenting and implementing policies which he has little or no part in formulating—particularly with regard to the critical question of Rwanda’s relations with the Democratic Republic of Congo. Any deviation from this approach, for example by issuing press statements that have not been cleared by the president’s office or the minister of defence, Paul Kagame, will put Mr Iyamuremye at risk of following in the footsteps of his predecessor, Amri Sued. Unlike Mr Sued, who is an independent politician, Mr Iyamuremye should be able to count on some political support from his colleagues in the Parti social démocrate (PSD) should he dare to differ with the RPF. The PSD has six cabinet members, giving it the largest representation in government after the RPF, but it is a young party and lacks a clear identity.

The parliamentary In line with EIU projections (2nd quarter 1999, page 8), the Rwandan press has discipline committee will opted not to challenge the parliamentary discipline committee, which has remain unchecked managed to secure the removal and replacement of 16 parliamentarians so far this year—more than 20% of the total. The protestations of the parliamentary president, Joseph Sebarenzi, about the committee’s behaviour may succeed in prompting the justice ministry to come up with legislation that defines the committee’s mandate and competence, but little progress can be expected in the near future. The basic problem for members of parliament at risk from the committee is that they have no electoral mandate with which to defend themselves from accusations ranging from absenteeism to complicity in the genocide. Further dismissals can therefore be expected.

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Only Rwanda will be keen The ceasefire agreement on the Democratic Republic of Congo signed in to disarm Palir Lusaka in mid-July commits all signatories to disarming and arresting the Rwandan interahamwe militia who are fighting in Congo under the banner of the Peuple en armes pour la libération du Rwanda (Palir). However, only the Rwandans and their Ugandan and Burundian allies are likely to show much enthusiasm for the task. Theoretically, the Lusaka agreement should make it more difficult for the Congolese president, Laurent Kabila, and his allies to co- operate militarily with Palir. However, it remains to be seen how far Mr Kabila and his allies are committed to the agreements, and how effective the monitoring mechanisms put in place will be.

The Joint Military Committee (JMC), which is to include all the belligerent parties in Congo, is charged with the organisation and supervision of the disarmament of all the non-signatory forces, although the status of the rebel factions remains unclear. Meanwhile, the UN is attempting to assemble a peacekeeping force, while the Organisation for African Unity (OAU) will provide an observer mission to monitor the performance of the JMC. The prospects for the JMC look distinctly gloomy unless the rebels backed by Rwanda and Uganda actually sign up to the agreement; in the longer term no UN force can be deployed until the JMC has fulfilled its mandate.

Rwandan-supported Rwandan government sources have admitted that the Rwandan Patriotic Army Congolese rebels may try to (RPA) would have liked to capture the Congolese diamond-producing town of capture Mbuji-Mayi Mbuji-Mayi before the Lusaka talks. If the town is captured, Mr Kabila will be greatly weakened by reduced revenue. Rwanda will therefore be tempted to make another attempt to capture it before a UN force is deployed in Congo. Although the Rwandan government has committed itself to the ceasefire, the Rassemblement congolais pour la démocratie (RCD) faction headed by Emile Ilunga, which is backed by Rwanda, has not. Thus the way is open for the RCD to try to capture Mbuji-Mayi and for Rwanda to reap the benefits should it succeed, while denying that it had any role in the attack, despite inevitable Congolese and Zimbabwean accusations to the contrary.

The prospects for Palir Irrespective of commitments by the belligerents to disarm Palir, in the short to are grim medium term the RPA should be able to ensure that it is unable to intensify military activity inside Rwanda. Palir’s military activity peaked in late 1997 and continued at significant levels until mid-1998, but has since tailed off considerably. This is partly because of disruptions to Palir’s supply lines from Congo, but is also because local people, particularly in Rwanda’s north-west, no longer seem willing to risk helping it and, without local co-operation, Palir can make little headway. It has lost local confidence because its promises to capture Ruhengeri and Gisenyi prefectures as a prelude to the conquest of the entire country have repeatedly failed to materialise. For the moment, the Rwandan government and the RPA have secured the co-operation of much of the population in the north-west. However, the possibility of the Hutu populations of Ruhengeri and Gisenyi shifting allegiances once again cannot be ruled out until the reality of genocidal policies has been dismissed.

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Plans for a rail link with The proposal to build a railway between Isaka in northern Tanzania and the Tanzania will be slow to Rwandan capital, Kigali, makes good economic sense. It was only colonial materialise rivalry that prevented Rwanda from being integrated into East Africa’s rail network in the first place, and a change is long overdue. An added attraction for Rwanda is that the Tanzanian route to the sea passes through only one set of borders rather than the two involved in the route to Mombasa, which would make the transit of Rwanda’s goods both quicker and cheaper. However, at the moment the Mombasa route is superior because of the comparatively poor state of Tanzania’s transport infrastructure. Once the terminal at Dar es Salaam to clear Rwandan goods and the inland port at Isaka to ease their transference from road to rail have been constructed and are fully functional (in about two years’ time), the Tanzanian option will be more attractive, although Mombasa will remain the better port. A continuous rail link from Kigali to Dar es Salaam would finally swing the proportion of Rwandan trade in Dar es Salaam’s favour, but this is a longer-term option. Building a 480-km railway will be time-consuming and very expensive. The money will have to come from international donors, and so far none has even been pledged, let alone delivered.

Real GDP growth will Although still not as high as pre-war levels, agricultural and manufacturing remain strong in 1999 production is improving steadily. Impressive rates of economic expansion should continue over the next two years, given the low post-war base. The “villagisation” process and improved national security should boost the total crop area planted and ultimately aid the largely underperforming agricultural sector. The EIU projects that real GDP will expand by 8% in 1999 and 6% in 2000, based on higher contributions from services and the eventual proceeds from the privatisation programme. Only when infrastructural improvements are achieved will economic development in Rwanda begin to approach that in neighbouring countries.

The liberalisation of the The 1999/2000 coffee harvest is expected to reach 15,000 tonnes which, if coffee sector may realised, would represent a 15% increase on the 1998/99 crop. This would still dampen production be well below the 40,000 or so tonnes that Rwanda’s coffee harvest used to bring in during the late 1980s and early 1990s, but it would at least be an indication that the liberalisation of the sector has borne fruit. The recent reduction of export taxes on coffee from 35% to 16%—an important factor in enabling peasant coffee producers to earn more from traders—appears to have underpinned the increase. However, the next stage of liberalisation will have a negative impact on incentives, at least in the short term. This season is the last in which the Rwandan coffee parastatal, the Office de cultivation industriel de Rwanda (Ocir), will be distributing free inputs (primarily insecticides and fertiliser). From the 2000/01 growing season, which begins in March 2000, such inputs will be distributed by the private sector and producers will be charged. Producers will not have to pay up front, but will have to pledge a proportion of their expected profits to traders, who will demand payment once the crop has been sold. In cases where producers do not sell directly to factories, the traders buying their coffee are likely to be the same traders who sold them the fertiliser, thus limiting the opportunity for producers to evade the repayment of their debts. Ocir is more concerned that traders will seek to

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exploit producers, and is hurriedly trying to encourage producers to form associations to protect their interests. The implementation of the new system will take time, and in the interim producers’ profit margins will fall owing to the added cost of inputs, thus diminishing their incentive to produce coffee rather than subsistence crops, for which there is a ready market and high prices. The Rwandan government is fully aware of this, and is hoping that the EU, the main source of funds for the restructuring of the coffee sector, will provide fresh finance to ease the transition.

Debt relief is expected to be According to IMF projections, debt-relief deals forthcoming after the G7 pledge worth $25m-35m per year of $70bn to the World Bank/IMF heavily indebted poor countries (HIPC) initiative could lead to a reduction in Rwanda’s debt-servicing commitments of between half and two-thirds by 2001. Rwanda’s current annual debt-servicing commitments are about $40m, and will probably rise to about $50m by 2001, so the expected relief is likely to be worth $25m-35m per year, provided Rwanda’s economic reforms remain on track.

Rwanda: forecast summary ($ m unless otherwise indicated) 1997a 1998a 1999b 2000b Real GDP growth (%) 13.0 10.5 8.0 6.0 Consumer price inflation (%; av) 7.4 10.0 9.0 8.0 Merchandise exports fob 93 82 85 75 of which: coffee 45 40 41 31 tea 21 25 25 23 Merchandise imports fob 246 236 255 270 Current-account balance –93 –120 –136 –163 Average exchange rate (Rwfr:$) 301.5c 312.3c 340.0 360.0

a EIU and official estimates. b EIU forecasts. c Actual.

Rwanda: gross domestic product Rwanda: exchange rate % change, year on year Rwfr:$; inverted scale

Rwanda 300 Sub-Saharan Africa 14 310

12 320

10 330 8 340 6

4 350

2 360 0 96 97(a) 98(a) 99(b) 2000(b) 370 1996 97 98 99(b) 2000(b) (a) EIU estimates. (b) EIU forecasts. Source: EIU.

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Review

The political scene

The transition process On June 8th a committee including all the political parties represented in continues Rwanda’s transitional Assemblée nationale (parliament) agreed to extend the transition process by five years to 2003, and the cabinet ratified the agreement a few days later. Several parties had argued for less than five years, while the ruling Rwandan Patriotic Front (RPF) wanted an extension of unspecified duration. An initial transitional period of five years, after which elections are to be held, was negotiated at multiparty talks in Arusha, Tanzania, in 1993. After the RPF took power in 1994 it formed a transitional multiparty government and legislature along the lines agreed in Arusha, but made it clear from the beginning that this transition could be extended if it was decided that Rwanda had not made sufficient progress towards national unity.

Many doubt that the RPF—which, given Rwanda’s complex ethnic make-up, would struggle to win free and fair elections—is committed to ending the transition at all. However, the RPF secretary-general, Charles Murigande, who chaired the parliamentary committee that took the decision, insisted that the local elections held in March (2nd quarter 1999, pages 10-11) demonstrated that his party and the government were commited to the democratic process. Mr Murigande stated that a new constitution would be in place by 2003, but said that holding a referendum on this constitution, as agreed in Arusha in 1993, would be an expensive waste of time.

The foreign minister is The foreign minister, Amri Sued, was sacked on July 8th. The Office of the sacked President declined to comment on his dismissal, though it referred to “professional dereliction”. The Rwandan news agency quoted unnamed government sources as saying that Mr Sued had been sacked because he did not defend Rwanda’s interests in a suitable manner. Mr Sued, a Hutu, is not a political heavyweight, and only assumed the foreign affairs portfolio in February, replacing the long-serving Anastase Gasana (1st quarter 1999, page 12). Mr Sued has been replaced by the former information minister, Augustin Iyamuremye, who appeared surprised at the appointment; the post of information minister remains vacant.

More parliamentarians are The parliamentary discipline committee, which had already succeeded in removed securing the removal of ten members of parliament earlier this year (2nd quarter 1999, page 15), repeated the process with six more MPs in early May. Their alleged crimes ranged from absenteeism and incompetence to genocide. On May 11th 13 replacements were sworn in, among them the first Tutsi parliamentarian of the predominantly Hutu Mouvement démocratique républicain (MDR) and an RPF member widely accused of genocidal crimes. The parliamentary speaker, Joseph Sebarenzi, who had expressed his unease at the activities of the discipline committee after the initial expulsions, has called for the process to be set on a legal footing, with the government bringing appropriate legislation before the Assemblée nationale.

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The Human Rights Parliament elected Rwanda’s seven-member Human Rights Commission (HRC) Commission is elected on May 24th. The HRC chairman, Gasana Ndoba, is a respected and independent-minded human rights activist who was in exile in Belgium during the 1994 genocide. The HRC’s members have been elected for three- year terms and apparently have the same political status as secretaries of state, but can be removed following a vote by a majority of parliamentary deputies.

A test case for press The disastrous and embarrassing purchase earlier this year by the Rwandan freedom is in the offing Patriotic Army (RPA) of defective and overpriced helicopters for $3m from Ugandan business people is set to turn into a test case for press freedom in Rwanda. The RPA colonel Franck Rusagara is suing a Newsline journalist, John Mugabi, for defamation, following an article by Mr Mugabi quoting an unnamed military officer as saying that Mr Rusagara took a 10% cut on the deal. Mr Rusagara is demanding that Mr Mugabi reveal the officer’s identity, but, according to Rwandan law, journalists have a right to protect their sources if they have reason to believe that they will be threatened if their identities are revealed. Rwandan law also states that the burden of proof in defamation cases rests with the accuser rather than the accused. For these reasons Mr Mugabi would appear to be in a strong position, but Rwandan journalists have been subject to considerable harassment in the recent past, and human rights observers are watching the case closely.

Another bishop faces arrest Following the much-publicised arrest of the Gikongoro Roman Catholic bishop, Augustin Misago, on April 14th (2nd quarter 1999, page 11), the government and the church have agreed to hold regular meetings in a bid to iron out difficulties between them. The church delegation at the first meeting at the end of the month was headed by the archbishop of Kigali, Theodore Ntihinyurwa. However, shortly afterwards it emerged that state prosecutors have opened a file on Mr Ntihinyurwa, following accusations that he was involved in the 1994 genocide in Cyangugu.

The RPA remains The RPA has remained active in the ongoing civil war in the Democratic entrenched in Congo— Republic of Congo in recent months, apart from during the unilateral ceasefire declared by Rwanda on May 28th, which the government ended on June 2nd after Congolese planes bombed Uvira. Estimates of the size of the RPA deployment vary considerably. The Rwandan Ministry of Defence is only prepared to conceded that 500 RPA soldiers have been killed or wounded since August 1998. It is likely that at least 15,000 troops are active in Congo. During the peace talks in Lusaka, which lasted from late June until mid-July, Zimbabwean government officials accused Rwanda of deploying an additional 7,000 soldiers in Congo, although this was in response to Rwandan denuncia- tions of Zimbabwe’s deployment of 3,000 more troops of its own, and was not confirmed by the Rwandan government.

—while the Lusaka The Lusaka talks achieved a commitment from all states involved in the Congo peace talks call for the conflict to a ceasefire, which was due to come into force on July 12th (though disarmament of Palir initial reports suggest that it has not). Agreement has also been reached that Congolese rebel groups—and thus implicitly their foreign backers, including Rwanda—will be able to retain the territory they have won in eastern Congo

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prior to an overall political settlement. The Lusaka ceasefire agreement also acknowledges the security risk posed to Rwanda by the Peuple en armes pour la libération du Rwanda (Palir) militia, which is operating in Congo. Palir consists primarily of members of the former Rwandan army, those who participated in the interahamwe militias during the 1994 Rwandan genocide, and new fighters who have been recruited since then. Palir has been fighting alongside the Congolese president, Laurent Kabila, since the rebellion against him broke out in August 1998, and has received fresh supplies of weapons as a result, despite recent denials from the Congolese foreign minister, Yerodia Abdoulaye Ndombasi. According to the Lusaka agreements, all the armed forces currently active in Congo, including those with whom Palir has been fighting as allies, are supposed to work together in a Joint Military Committee (JMC) to disarm Palir and hand over its organisers to the International Criminal Tribunal for Rwanda (ICTR), which is based in Arusha. The biggest hurdle to date has been the participation of the various rebel groups supported by Rwanda and Uganda (see below). The proposed fate of Palir’s foot soldiers is unclear, although Rwanda wants them to be repatriated. The Lusaka deal paves the way for the RPA to continue its fight in Congo against Palir, while presenting Mr Kabila and his allies with the difficult challenge of disarming a militia that has been one of the most effective fighting forces on Mr Kabila’s side to date.

Rwanda backs Emile One of the main problems at the Lusaka talks was that the Congolese rebel Ilunga’s RCD faction movement was divided into three factions. The divisions among Congo’s rebels had been worsening for several months before the Lusaka talks, with Rwanda backing the Rassemblement congolais pour la démocratie (RCD), which is headed by Emile Ilunga and based in Goma. This faction controls almost all the RCD’s fighting units. Uganda, meanwhile, backs the RCD faction headed by Ernest Wamba di Wamba, based in Kisangani, which does not appear to control many soldiers. Uganda also backs the Gbadolite-based Mouvement pour la libération du Congo (MLC). Mr Ilunga’s faction eventually refused to sign the ceasefire agreement because Mr Wamba’s had already done so.

Rwandan and Ugandan government delegations met in Tanzania in early May to try to resolve the divisions between the rebel factions, but failed to do so, despite official assertions that all “misunderstandings” had been ironed out. The government delegations met again in Goma in mid-May, along with a Tanzanian delegation, and again failed to resolve the deadlock. A week later clashes broke out in Kisangani between the two RCD factions, with reliable sources indicating that Rwandan and Ugandan troops were involved on opposing sides. The then Rwandan foreign minister, Amri Sued, rushed to Kisangani immediately, and shortly afterwards both he and the Ugandan government denied that their troops were involved or that there were any serious differences between them.

Rwanda has been peaceful Largely as a result of the continued RPA deployment in eastern Congo, Palir in recent months activity in Rwanda has been minimal in recent months, with no serious incidents reported even in the previously troubled north-west region. Humanitarian agencies have reported that conditions for the tens of thousands

EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 14 Rwanda

of people who have recently moved from camps to resettlement villages in the north-west have improved significantly, though humanitarian aid is still required (2nd quarter 1999, page 14). Although water and sanitation provision in the villages remains inadequate, malnutrition has abated, and the number of people admitted to therapeutic feeding centres has fallen. There are still concerns over the fallout from the conflict in Congo, however. More than 21,000 Rwandans have returned from Congo since the beginning of 1999, according to the UN High Commissioner for Refugees (UNHCR). A further 30,000 returnees may arrive from the Congo in the next few months, and will require special handling.

A new Supreme Court is The former general prosecutor, Simeon Rwagasore, was appointed president of announced the Rwandan Supreme Court by parliament in July. Five new vice-presidents were also appointed. The court had become more and more paralysed as magistrates from the former regime who were antagonistic towards the prosecution of genocide suspects remained in place until this year. The stagnation of the Supreme Court also meant that numerous tribunals were unable to function owing to lack of co-ordination, resulting in a backlog in the prosecution of genocide suspects.

Rwandan courts deliver Ten people have been sentenced to death for genocide crimes in Rwandan fewer death sentences— courts since the end of April, while many more have been acquitted—in contrast to the first genocide trials, in which there were few acquittals and many more death sentences. In early June 148 genocide suspects were released in Kibungo because the files against them were either non-existent or incomplete. More than 115,000 remain in prison, however, and in an attempt to help speed up the justice process for them, the US government donated $10m to the justice department in mid-June.

—but Bernard Ntuyahaga The tussle between the Rwandan and Belgian governments over the location of will probably be tried the trial of Bernard Ntuyahaga, the former head of the Kigali army barracks, has been resolved in Rwanda’s favour, subject to the confirmation of Tanzania’s chief justice. Mr Ntuyahaga surrendered himself to the ICTR in June 1998, but was released in March 1999, whereupon he was arrested by the Tanzanian authorities. The Belgian government applied for his extradition in connection with the killing of ten Belgian soldiers in 1994, while Rwanda did the same in connection with his alleged genocide crimes (2nd quarter 1999, page 13). The hearing to decide where Mr Ntuyahaga should be tried has been postponed five times, most recently in mid-June after he asked the Belgian defence lawyer Luc de Temmerman to represent him. Mr de Temmerman achieved notoriety at the ICTR when defending Georges Rutaganda, the former vice-president of the interahamwe, by arguing that the genocide never happened (4th quarter 1996, page 28).

More are found guilty at The ICTR passed sentence on Clement Kayishema and Obed Ruzindana on the ICTR May 21st, finding both men guilty of genocide. Mr Kayishema, the former prefect of Kibuye, was sentenced to life imprisonment, while Mr Ruzindana, a businessman from Kibuye, was given a 25-year sentence. The ICTR justified the lesser sentence for Mr Ruzindana on the grounds that he was young at the

EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 Rwanda 15

time of the genocide (he was 32, eight years younger than Mr Kayishema), and is capable of rehabilitation. The Rwandan government reacted angrily to the disparity between the sentences, arguing that Mr Ruzindana had refused either to admit to his crimes or to ask for forgiveness. Meanwhile, the trials of Mr Rutaganda (see above) and Alfred Musema, a former director of a tea factory, have been completed and judgements are now awaited.

More countries agree to The ICTR reached a provisional agreement with the Zambian government in imprison those convicted May under which those convicted by the tribunal will be imprisoned in by the ICTR Zambian jails. The ICTR says that similar agreements are close to completion with the governments of Madagascar and Benin, and have already been concluded with the government of Mali. Genocide convicts will be imprisoned in different cells to other inmates, and prison conditions will be monitored by the ICTR to ensure that they meet minimum UN standards. There is thus a good chance that genocide convicts will receive better treatment than their fellow inmates.

In early June Laity Kama of Senegal, who had served as ICTR president since May 1995, was replaced in the post by a South African judge, Navanethem Pillay. Ms Pillay said that her main task was to speed up proceedings. Shortly afterwards the ICTR chief prosecutor, Louise Arbour, resigned, though she will continue in the job until September.

A former Swedish prime On May 7th the UN secretary-general, Kofi Annan, appointed the former minister heads the UN’s Swedish prime minister Ingvar Carlsson to head the inquiry into the role of genocide probe the UN during the Rwandan genocide (2nd quarter 1999, page 14). Two weeks later the former South Korean foreign minister Han Sung-Joo and the Nigerian general Rufus Kupolati, who has worked with the UN peacekeeping mission to Israel, were also appointed to the investigative team. The team began work in late June and is expected to present its report by the end of the year.

Health

The Great Lakes AIDS Regional health ministers, with the exception of the Congolese health initiative is to be based minister, met in Kigali at the end of April to discuss the AIDS epidemic in the in Kigali region and to launch the Great Lakes Initiative against AIDS (GLIA). The GLIA’s main office has been established in Kigali, and is embarking on projects costing an initial $1.2m, primarily funded by the UN AIDS organisation, UNAIDS. Of the total, $400,000 is for an HIV-prevention programme that will be based along the region’s major transport routes. A further $490,000 has been set aside to address what the GLIA calls the social and economic aspects of the crisis, and $260,000 is for a regional information exchange system and to improve the care available to victims. Strangely, only $4,000 has been allocated to prevent HIV transmission among the hundreds of thousands of refugees and internally displaced people in the region.

EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 16 Rwanda

The economy

A rail link is planned The decision earlier in 1999 by Kenya and Tanzania to reduce the maximum between Isaka and Kigali loads allowed on trucks transiting their territories has had a significant impact on transportation costs in Rwanda (1st quarter 1999, page 21). Rwandan transport companies, alarmed at the steep increase in their overheads—which cannot be fully recovered through domestic price increases because of the weakness of domestic purchasing power—have appealed to the government for help. The government has replied by calling on transporters to consider using rail networks to move their goods instead. At present, the nearest railheads to Rwanda are in western Uganda at Kasese, and in eastern Tanzania at Kigoma on the shore of Lake Tanganyika and at Isaka on the way to Mwanza on Lake Victoria. The Rwandan government recently released money to purchase trains to run from Dar es Salaam as far as Isaka, where there are plans to build a land port to ease the disembarkation of goods and their re-embarkation onto trucks for the 480-km last leg of the journey to Rwanda. In early June the Rwandan transport minister, Vincent Biruta, announced plans for a railway between Isaka and Kigali, but since neither Rwanda nor Tanzania have the money for such a venture, it will require donor funding.

The Tanzanian government is keen to increase its share of Rwanda’s import and export business—at present, most of Rwanda’s trade goes through Mombasa— and to this end has agreed to remove a tax imposed earlier this year on Rwandan goods transiting the country. The Tanzanian government has also earmarked land near Dar es Salaam where a terminal is to be constructed to handle Rwandan goods. This should make customs clearance quicker and cheaper.

Electrogaz’s water and In mid-May the government announced that as part of the privatisation energy components are process for the state distributor of water, electricity and gas, Electrogaz, the separated— company’s water and energy components would be split up. However, there is still no timetable for their sale or for that of the parastatal telecommunications company, Rwandatel.

—and Shell finally acquires Shell finally took control of the assets of the state oil company, Petrorwanda, Petrorwanda’s assets on June 1st, though the agreement on the sale took place in December 1998 (1st quarter 1999, page 21). The deal was originally meant to be worth $50m, but because Petrorwanda carries substantial debts, which have been taken on by Shell, the overall purchase price turned out to be just $2.1m.

New banks are to open Three new commercial banks are to start banking services in Kigali, bringing the total number of banks operating in the country to 11. Rwanda currently has seven commercial banks and one co-operative bank, which commands the biggest network of branches. According to an official of the Banque nationale du Rwanda (BNR, the central bank), the processes are at an advanced stage, with one bank having already fulfilled over 90% of the requirements— including a capital base of $285,000. Rwanda may also enact a new law giving powers to the central bank to decide, depending on economic indicators, the amount of capital necessary for setting up a financial institution. The banks will focus on boosting local savings in the economy, which are at very low rates.

EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 Rwanda 17

Bank employees are In early June 20 employees of the central bank were arrested following the arrested for theft disappearance of Rwfr30m ($90,000) in Rwfr5,000 notes. The alleged heist took place in mid-March, when the BNR replaced Rwanda’s Rwfr500, Rwfr1,000 and Rwfr5,000 notes with new ones, which are apparently more difficult to forge.

The Virunga national park The Virunga national park, home to the famed gorillas of Rwanda, reopened in reopens June having been closed for three years. In 1996 it earned $311,000 from 2,600 visitors, but it was shut down owing to guerrilla activity both in the park and on the Congolese side of the border. The park, if managed well, has the potential to earn millions in foreign exchange.

RPA-linked companies A report on a US-based Internet web page dedicated to news about Central are allegedly selling Africa, NTN, has alleged that Rwandan companies with close links to the RPA Congolese minerals are dealing tantalum and niobium obtained from rebel-occupied Congo to US, Russian and Belgian buyers. The report alleges that the Rwandan Banque du commerce du développement et d’industrie, and its sister banks in Europe, are the main financial backers for the deals. According to NTN, companies close to the Congolese president, Laurent Kabila, are co-operating with the Rwandans. Tantalum and niobium are rare metals, and 60% of world supplies are found in Congo. The US produces only 1% of global supplies, but is the world’s main consumer of the minerals, which have a number of applications in high- technology industries.

Agriculture

Swift action minimises the It was reported in May that army worms had infested some 6,000 ha of arable threat from worms and grazing land in eastern Rwanda, but swift action from the Ministry of Agriculture and aid agencies, combined with timely rains, appears to have succeeded in containing the outbreak. At one stage the Ministry of Agriculture was predicting that 500,000 ha of land was at risk, and there is still concern that there might be a second invasion of the worms in time to wreak havoc on the September harvest.

Better producer prices lead The 1999/2000 coffee harvest is now predicted at 15,000 tonnes which, if to a higher coffee crop realised, would represent a 15% increase on the 1998/99 crop. The expected increase is thought to be due to the higher prices being paid to producers this year (see Outlook for 1999-2000).

Foreign trade and payments

Rwanda stands to receive The IMF expects Rwanda to benefit considerably from the $70bn worth of debt major debt relief relief promised to poor countries at the G7 summit in mid-June. The EIU estimates that Rwanda’s external debt at end-1998 totalled $1.2bn, and its debt-service commitments over $40m. The Rwandan government has demonstrated impressive fiscal and monetary discipline since it received an IMF enhanced structural adjustment facility (ESAF) loan two years ago. Donors also regard Rwanda as a special case and, as a result, the country stands to see

EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 18 Rwanda

between half and two-thirds of its debt-servicing commitments cancelled in 2001, provided financial discipline continues. At a meeting in London in July to assess Rwanda’s recent economic performance, aid ministries and charities including Oxfam argued that, while the Cologne initiative does not foresee Rwanda qualifying for deep relief before 2003, providing relief this year could make an extra $32m available immediately. This would be enough to phase out user fees in healthcare and education. Oxfam also argued that donors would require assurances that savings would be used to cut poverty, and not to finance the war in Congo.

The EU unfreezes aid On May 18th the EU announced an E68m ($70m) aid package for Rwanda. Of the total, E16m is for budget support, E50m for various development projects, and the remaining E2m for a fund intended to generate employment in Kigali. The money had been earmarked for release six months earlier, but was held back in protest at Rwanda’s involvement in Congo’s civil war. However, the argument that aid money would be used on the war effort and should thus be withheld has been hard to sustain because of the apparent ability of the Rwandan Patriotic Army (RPA) to finance the war independently, as a result of which no additional costs have shown up in the national accounts.

In early July the World Bank proposed fresh lending to Rwanda worth $120m-160m over the next two years. The money is intended for human resources and the agricultural sector. On May 13th Japan announced that it had rescheduled Rwfr3bn ($8.9m) of debt owed by Rwanda, fulfilling the commitment it made at the Paris Club in June 1998 (3rd quarter 1998, page 33).

EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 Burundi 19

Burundi

Political structure

Official name République du Burundi

Form of state Unitary republic

Legal system Based on Belgian law and the transitional constitution approved in June 1998

National legislature Assemblée nationale, with 121 members, 81 of whom were elected in 1993 and the rest appointed in 1998

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

Head of state President, currently Major Pierre Buyoya

National government Appointed by Mr Buyoya in June 1998

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); Conseil national pour la défense de la démocratie (CNDD)

First vice-president Frederic Bamvuginyumvira Second vice-president Mathias Sinamenye

Key ministers Agriculture Salvator Ntihabose Civil service & labour Emmanuel Tungamwese Commerce, industry & tourism Nestor Nyabenda Communal development Gaspard Ntirampeba Defence Lieutenant-Colonel Alfred Nkurunziza Development & reconstruction Leon Nimbona Education Prosper Mpawenayo Energy & mines Bernard Barandereka Finance Astere Girukwigomba Foreign affairs & co-operation Severin Ntahomvukiye Health Dr Juma Mohamed Kariburyo Human rights & institutional reform Eugene Nindorera Information & government spokesman Luc Rukingama Interior & public security Colonel Ascension Twagiramungu Justice Terence Sinunguruza Land & environment Jean-Pacifique Nsengiyumva Peace process Ambroise Niyumbasa Public works & housing Denis Nshimirimana Resettlement of refugees & displaced persons Pascal Nkurunziza Transport & telecommunications Colonel Epitace Bayaganakandi Women, welfare & social affairs Romaine Ndorimana Youth, sports & culture Gerard Nyamwiza

Central bank governor Gregoire Banyiyezako

EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 20 Burundi

Economic structure

Latest available figures

Economic indicators 1994 1995 1996 1997a 1998a GDP at market prices (Bufr bn) 233.3 249.9 272.6 337.3 425.1 Real GDP growth (%) –18.0 –7.3 –8.4 0.4 4.5 Consumer price inflationb (av; %) 14.8 19.3 26.4 31.0 17.0 Populationc (m) 5.87 5.98 6.09 6.20 6.31 Exports fobd ($ m) 80.7 112.5 40.1 87.3 49.0 Imports fobd ($ m) 172.6 175.6 100.0 97.9 102.6 Current-account balance ($ m) –16.9 –7.8 –40.3 4.0 –33.3 Reserves excl gold (year-end; $ m) 204.7 209.5 139.6 104.4e 65.5e Total external debt (year-end; $ m) 1,108 1,183 1,175 1,183 1,200 External debt-service ratio, paid (%) 39.6 27.7 123.4 44.6 61.2 Green coffee productionf (‘000 tonnes) 20.9 30.2 14.5 31.8 16.5 Exchange rate (av; Bufr:$) 252.7 249.8 302.8 352.4e 447.8e

July 20th 1999 Bufr539.57:$1

Origins of gross domestic product 1997 % of total Components of gross domestic product 1997 % of total Agriculture 53.3 Private consumption 81.6 Industry 10.1 Public consumption 14.5 Manufacturing 6.6 Gross domestic investment 8.1 Services 30.0 Exports of goods & services 10.0 GDP at factor cost 100.0 Imports of goods & services –14.2 GDP at market prices 100.0

Principal exports fob 1997 $ m Principal imports cif 1997 $ m Coffee 77.0 Capital goods 45.3 Tea 9.1 Consumption goods 44.1 Manufactures 3.7 Intermediate goods 33.3

Main destinations of exports 1997g % of total Main origins of imports 1997g % of total UK 29.1 Belgium-Luxembourg 18.2 Germany 21.6 France 9.4 Belgium-Luxembourg 16.0 Germany 6.6 Switzerland 13.5 Japan 6.2

a EIU and IMF estimates. b Consumer price index for Bujumbura. c Mid-year estimates. d Balance-of-payments basis. e Actual. f Crop years (April-March) starting in year stated. g Based on partners’ trade returns; subject to a wide margin of error.

EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 Burundi 21

Outlook for 1999-2000

Mr Buyoya appears to be The establishment of the transition government, which will keep President in control Pierre Buyoya in power for another five years with the backing of significant elements of the Front pour la démocratie au Burundi (Frodebu), is a major achievement for Mr Buyoya, rivalling his success in securing the lifting of sanctions earlier this year (2nd quarter 1999, page 26). There will be plenty of opportunities between now and 2004 for him to make a convincing case for the transition to be extended owing to unforeseen problems. This transition period will give Mr Buyoya another chance to realise his ambition of being credited with unification in the mould of the Burundian national hero, Prince Louis Rwagasore. This stands in stark contrast to his image as a coup-plotter when he came to power for the second time in July 1996.

The success of the The component of the transition programme that deals with the reform of the transition will hinge on armed forces will be crucial to the success of Mr Buyoya’s plans. Members of military reform Frodebu are working with Mr Buyoya to justify their participation by arguing that the partnership provides the necessary stability for the enduring trans- formation of Burundi’s institutions, the armed forces foremost among them. But if the reforms of the military appear to be cosmetic, these Frodebu members will be seen, not least by their enemies within the party, as having been duped.

Frodebu seems less It is also becoming more difficult to predict what the future holds for Frodebu. equipped to govern Despite the best efforts of the former Tanzanian president Julius Nyerere to hold the party together, Frodebu’s heavyweights appear fatally drawn to falling out with each other. This is of little concern to Mr Buyoya, who has enough Frodebuists on board to give his government credibility, but it does not bode well for the party’s prospects of ever being ready to win and exercise a democratic mandate.

Mr Buyoya will be tempted Prospects for the Arusha peace process, which is being mediated by to talk directly to the Mr Nyerere, are particularly gloomy at present, and there is little likelihood of CNDD-FDD even a token deal for the sake of donors. The offer in early July by Jean-Bosco Ndayikengurukiye, the leader of the Conseil national pour la défense de la démocratie-Forces pour la defense de la démocratie (CNDD-FDD), to engage in direct negotiations with the government is another complication. The CNDD- FDD and other militia forces have proved once again in recent months that Burundi’s civil war cannot be won militarily, and that ending it will require a negotiated settlement. The Burundian government has long agreed with this approach, and has called on Mr Nyerere to include militia representatives in the Arusha talks, to no avail. With feelings running high in Burundi about the most recent spate of killings, Mr Buyoya is coming under pressure to take up Mr Ndayikengurukiye’s offer. However, if he does so, he will lay himself open to the charge that he is seeking to destroy the Arusha process from both the predominantly Hutu and the predominantly Tutsi negotiating blocs at Arusha, as well as from Mr Nyerere. Arusha’s failures could then be pinned by these elements on Mr Buyoya and his government, which would negate all the work

EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 22 Burundi

he has done to demonstrate his commitment to the only peace process for Burundi that the international community recognises. Direct talks between the CNDD-FDD and the government would make it almost impossible for the Arusha process to continue. This, in turn, would make it very hard for donors to justify the resumption of aid to Burundi, and would make Mr Buyoya’s position less secure. According to Mr Nyerere, who has publicly blamed the government for the failure of the talks, the next round of talks will take place in Arusha on September 6th, if the necessary financing is available.

Burundian soldiers in Burundian negotiators kept a low profile at the talks in Lusaka in late June to Congo may retreat closer mid-July to end the civil war in the Democratic Republic of Congo (see to the border Rwanda: The political scene). President Buyoya only signed the ceasefire agreement as an observer, not as a belligerent; this should make it easier for Burundi’s troops in Congo to continue their campaign against Hutu rebel militia. However, because the government has signed the ceasefire, Burundian troops may retreat to positions closer to Burundi’s border.

Balance-of-payments The EIU expects Burundi to run a current-account deficit of $30m-40m over the support may not forecast period. Earlier in the year Burundi’s international donors looked close materialise— to resuming balance-of-payments support to the country, although this now appears increasingly unlikely, especially in 1999. This is because donors were persuaded to recommit themselves to the Arusha process once sanctions were suspended in January 1999—in large part because of pressure from them. But the Arusha process is showing few signs of success. It is still possible that something unexpected will result from the fifth round of talks in Arusha (Arusha V) in time for the donor roundtable conference in Geneva in October. As a result, some balance-of-payments support could be delivered fairly quickly after the conference. Prospects for the resumption of development assistance are perhaps brighter, since donors are better placed to put the case for such funds on humanitarian grounds, despite the lack of encouraging signs from Arusha.

—with dire consequences The consequence of a lack of donor funds will be a further decline in foreign- for Burundi’s economy— exchange reserves, forcing the government to default on more of its foreign debt-service obligations and build up domestic debt. The Burundian franc will continue to depreciate, and the government will probably be forced to consider devaluing the official exchange rate in order to contain the divergence between the official and parallel rates. We project that the exchange rate will average Bufr560:$1 in 1999 and Bufr600:$1 in 2000, assuming there is no official devaluation. The growing divergence between rates will in the meantime increase the incentive to smuggle Burundian goods out of the country, so there will be more shortages of locally produced goods, in a repeat of the current sugar shortage.

—and unemployment The lack of foreign exchange will continue to have a negative impact on industrial production and, while the parastatals will probably survive, private operations, which are already struggling, are more likely to go bankrupt instead, exacerbating Burundi’s unemployment crisis.

EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 Burundi 23

Bad weather and insecurity Agricultural production is less dependent on imported inputs, but will look set to impede continue to suffer from increased insecurity in important agricultural agricultural production provinces. The weather is much harder to predict, but harvests have already been affected by the lack of rain, and the overall production figures for the year are likely to be disappointing. The increase in coffee production is a bright spot in an otherwise gloomy picture, though even this will be offset by an expected fall in the international coffee price of up to 20% year on year. The combination of lower agricultural production and the foreign-exchange crisis has led us to revise our growth forecast for 1999 down to 3%, although growth should accelerate to 4% in 2000.

Burundi: forecast summary ($ m unless otherwise indicated)

1997a 1998a 1999b 2000b Real GDP growth (%) 0.4 4.5 3.0 4.0 Consumer price inflation (av; %) 31.0 17.0 9.0 8.0 Merchandise exports fob 87 49 55 60 of which: coffee 77 39 37 31 tea 9 9 8 8 Merchandise imports fob 98 103 108 115 Current-account balance 4 –33 –32 –41 Average exchange rate (Bufr:$) 352.4c 447.8c 560.0 600.0

a EIU and official estimates. b EIU forecasts. c Actual.

Burundi: gross domestic product Burundi: exchange rate % change, year on year Bufr:$; inverted scale

Burundi 300 Sub-Saharan Africa 6 350 4

2 400

0 450 -2

-4 500 -6

-8 550 -10 1996 97(a) 98(a) 99(b) 2000(b) 600 1996 97 98 99(b) 2000(b) (a) EIU estimates. (b) EIU forecasts. Source: EIU

Review

The political scene

Five more years of the At the end of May President Pierre Buyoya proposed a ten-year political Buyoya regime are transition for Burundi in which he would rule for the first five years and a inevitable successor from the Front pour la démocratie au Burundi (Frodebu) would rule for the remaining five years. According to the plan, Burundi’s parliament would be enlarged to include members of all the political parties currently involved in the peace talks in Arusha, Tanzania, which are being mediated by the former Tanzanian president Julius Nyerere. There would also be an appointed and “ethnically balanced” Senate with unspecified powers. A few days later Mr Buyoya presented his plans for Burundi’s security institutions. These seek to address the concerns of many Hutus that the police and army are biased against them, by establishing new bodies untainted by the past. According to the plan, there is to be a new security department with responsibility for both the army and the police, and a new communal police force.

Negotiating teams are The division of the negotiating parties in the Arusha process into three groups roughly divided in three began in early May, when Mr Nyerere invited seven predominantly Hutu parties to Moshi, Tanzania, for consultations about how they could harmonise their positions. The talks were successful, with the seven subsequently calling themselves the Moshi group; they began negotiating as such at committee meetings in Arusha later in the month. This round of committee meetings made some headway:

• the commission on the nature of Burundi’s conflict finally began an examination of the post-independence period;

• the commission on democracy and good governance achieved consensus on the need for the separation of powers and the inclusion of all ethnic groups in the justice system; and

• the commission on peace and security agreed on the identity of the victims of Burundi’s cyclical violence and broached the important subject of the composition of Burundi’s security forces.

The formation of the Moshi group was swiftly condemned by the predominantly Tutsi parties in Arusha, who argued that it would enable extreme views to dominate. Ironically, these parties then formed a bloc of their own, the G8. The predominantly Tutsi Union pour le progrès national (Uprona), senior positions in which are held by Mr Buyoya’s supporters, stayed out of the G8. The government and parliament’s negotiating teams have remained outside both the Moshi group and the G8 and, together with Uprona, are now referred to as G3, though they have not formally constituted themselves as such.

Arusha V starts late The plenary sessions of for the fifth set of talks (Arusha V), which were due to begin in June, have been postponed until the end of July. The next round of committee sessions did resume in early July, but they have made frustratingly slow progress. Mr Nyerere had hoped that the grouping of the 18 negotiating

parties into three factions in May would save time and make the negotiation process easier, but instead it has polarised positions and made compromise more difficult. In the latest and most troubling example of this tendency, on July 13th the predominantly Tutsi G8 bloc, having previously suspended proceedings for a day in commemoration of the most recent victims of Burundi’s civil war, accused the G3 bloc, which includes the government’s negotiating team, of colluding with Hutu rebels. The G3 bloc immediately called for this “slanderous declaration” to be withdrawn. Mr Nyerere subsequently blamed the government for the talks’ failure to advance, and the next round in September will have to deliver.

One potentially promising development at Arusha is the inclusion of a delegation representing Burundi’s refugee population in Tanzania. The Burundian government had argued that refugees were already represented by militia delegations (2nd quarter 1999, page 29). The delegation has called for refugees to be allowed to have their old jobs back in the civil service if they return, and for guarantees to be given about the return of their property.

The CNDD-FDD is still The formation of the Moshi group has enabled some measure of reconciliation excluded from Arusha— between the external wing of Frodebu, headed by Jean Minani, and the Conseil national pour la defense de la démocratie (CNDD), which was formed by the former Frodebu interior minister Leonard Nyangoma in 1995. However, it has done nothing to heal the divisions between the CNDD and a breakaway faction of this organisation called the CNDD-Forces pour la défense de la démocratie (CNDD-FDD), led by Jean-Bosco Ndayikengurukiye. The CNDD- FDD commands the FDD militia, which is one of the two main military opponents to the Burundian armed forces. The exclusion of the CNDD-FDD from the Arusha process has long been a point of contention, with the Burundian government and most observers arguing that its absence will prevent the talks from ending the war (1st quarter 1999, pages 31-32). Mr Nyerere is not opposed to the CNDD-FDD’s presence at Arusha in itself, but wishes to prevent the precedent of political groupings increasing their representation at the talks by staging a “split”. Mr Nyerere says that he will allow the inclusion of the CNDD-FDD either as a separate entity or as part of the CNDD, but neither option is acceptable to the CNDD-FDD, which insists that it is the “true” CNDD.

—and wants direct talks The net result is that the CNDD-FDD is still not formally allowed into the talks. with the government In response, it has stepped up its military attacks inside Burundi, particularly in late June and early July (see below). In mid-July Mr Ndayikengurukiye called for direct talks between the CNDD-FDD and the Burundian government. President Buyoya will be tempted to agree to the proposal, although he knows that doing so could well end the Arusha process.

Divisions appear in The formation of the Moshi group has complicated the divisions between the Frodebu’s internal wing external wing of Frodebu and the internal wing, which is part of Mr Buyoya’s government and is active in parliament. Immediately after the Moshi meeting Frodebu’s secretary-general, Augustin Nzijobwami—who was expelled from the party by Mr Minani in March, but refused to recognise the expulsion

(2nd quarter 1999, page 27)—called a meeting of the party to describe the formation of the Moshi group as flagrantly ethnicist and a violation of the founding principles of Frodebu.

A united Frodebu is central to Mr Nyerere’s hopes for a political settlement in Burundi, and in order to avert a formal split in the party Mr Nyerere invited the internal Frodebu leadership to Tanzania for a meeting with Mr Minani and other external wing leaders. The meeting failed to resolve the tensions between Mr Minani and Mr Nzijobwami, but it did contribute to an intriguing shift in allegiances on the part of several key members of the internal wing of Frodebu. It now appears that Burundi’s first vice-president, Frederic Bamvuginyumvira, and the speaker of Burundi’s parliament, Leonce Ngendekumana, are closer to Mr Minani than to Mr Nzijobwami, though they have not abandoned the principle of working with Mr Buyoya and have not distanced themselves from his transitional programme for Burundi.

The civil war intensifies After a period of relative calm in the first few months of the year (2nd quarter once again 1999, page 30), Burundi’s long-running civil war has intensified once more. Major and minor attacks have been reported in most provinces, particularly in Rutana, Ruyigi, Bujumbura Rural, Bururi, Makamba and the environs of the Kibira forest in the north-west. There has also been a spate of ambushes on all the main approach roads to Bujumbura city.

The increase in attacks was partly due to the, now familiar, reason that rebel militia are seeking to raise their profile during the various rounds of the Arusha process in order to demonstrate the need for them to be included in the talks. Another factor appears to be a change in attitude towards Burundi’s refugees from Tanzania. The Burundian government continues to accuse Tanzania of giving support to the rebels who move in and out of these refugee populations and, if not actually assisting them, then doing very little to prevent their attacks on Burundi. However, despite its refusal to allow Burundi to send troops into Tanzania in pursuit of rebels, there are signs that the Tanzanian authorities in border areas are making life harder for Burundian refugees. They have increased their surveillance, prompting some militia groups to re-enter Burundi and operate from there.

Another reason for the increase in attacks has been the increasing frustration of the Parti pour la libération des peuples Hutu (Palipehutu) over the fact that the CNDD-FDD has been claiming responsibility for attacks carried out by Palipehutu’s militia, the Forces nationales de libération (FNL). Palipehutu has consequently been working hard to attract attention. In early June it claimed that its forces were advancing on Bujumbura, and warned all foreigners to leave. Many of the ambushes on the roads to Bujumbura that followed appear to have been the FNL’s work, and in mid-July Palipehutu followed them up by repeating its warning to foreigners to leave and its demand to be included in the Arusha talks.

Burundi commits itself to Although Burundian troops remain deep within the Democratic Republic of the ceasefire in Congo Congo, the Burundian government is sticking to its position that its troops are present to protect Burundi’s borders and that Burundi is neutral in the conflict. For a long time the Congolese government said little about the Burundian presence, but on May 24th Faustin Munene, the Congolese commander-in- chief, denounced Burundi and threatened to bomb Bujumbura. The Burundian government reacted immediately, saying that it had the right to protect its borders and that if Bujumbura was bombed Burundi’s armed forces would retaliate. A few days later Uvira, which is only about 30 km from Bujumbura and close to the Congolese border, was bombed, but Congo has not carried out its threat to extend the raids. A Burundian delegation was present at the Lusaka peace talks in June-July to resolve the Congo conflict, but kept a low profile, as did Mr Buyoya who signed the ceasefire document on July 10th. The document commits regional states with troops in the area to participate in the Joint Military Committee, which will disarm Rwandan rebel militia (see Rwanda: The political scene), but is silent on the issue of the Burundian militia operating in Congo in tandem with their Rwandan counterparts.

A new penal code is On June 3rd the Assemblée nationale (parliament) adopted a new penal code, adopted— which was described by the justice minister as revolutionary; it will come into force next year. The code forbids torture, arbitrary arrest and prolonged detention without trial, all of which are commonplace in Burundi. Of the 10,000 or so detainees in Burundi today, only 2,200 have been tried and convicted, while the rest endure prolonged preventative detention—though the government has committed itself to improving this ratio by 2000. The new penal code allows lawyers to intervene from the moment a person is charged rather than only when the case reaches trial, as is present practice; this means that it can be years before a detainee has access to a lawyer.

—while the prosecutor has Meanwhile, according to research by the British human rights group begun reforming the International Alert, Gerard Ngendabanka, the Frodebuist prosecutor appointed justice system by the government in December 1998, has already made some improvements to the justice system. Mr Ngendabanka has ordered local prosecutors around the country to visit the prisons and determine which cases have been pending for a long time, and as a result 275 people have been released because of a lack of documented evidence against them. In a bid to prevent arbitrary arrest, prison directors have been instructed not to accept prisoners from the police unless their paperwork is in order, which is already reducing the imprisonment rate.

A sentence is passed in the On May 14th sentences were passed in the long-running case against those Ndadaye assassination trial suspected of assassinating the Burundian president Melchior Ndadaye in 1993. The case has been controversial and has drawn repeated criticism from Frodebu and from Ndadaye’s family for its lack of determination to find the real killers. They were angry that many key witnesses were never called, and contrasted the conduct of the case with the determined way in which many of the alleged authors of the 1993 massacres that followed the assassination have been pursued. The court found 28 of the accused guilty and sentenced five of them to death. However, it acquitted all the senior officers and politicians who had been accused, including Colonel Charles Ntakije, the then minister of defence, Colonel Jean Bikomagu, then head of the armed forces, and Colonel Isaïe Nibizi, who was in charge of presidential security. The verdict dismayed Frodebuists, and the CNDD-FDD alleged that it was designed to remove “troublesome witnesses” rather than to establish the truth.

The government clamps The government has stepped up its clampdown on the independent press in down on the press recent months, targeting any institution that does not advocate the government partnership line. On June 11th Dieudonne Ntakarahera, the head of the independent Azania news agency, was arrested for running an article that criticised Mr Buyoya’s transition programme. On June 17th the head of Netpress, Jean-Claude Kavumbagu, was arrested for violating copyright law. Reporters sans frontières and the Burundian journalists’ association took up Mr Kavumbagu’s cause and called for his release, which was secured on May 29th. Netpress, whose political sympathies lie with predominantly Tutsi parties who oppose any negotiation with genocidaires, has been an irritant to Mr Buyoya’s government for some time. Meanwhile, the Frodebuist newspaper L’Aube de la Démocratie was suspended on June 18th, officially on the grounds that it published two competing editions on the same day.

The economy

Tax receipts are lower than Initial reports from Burundi’s tax collectors and customs officials suggest that expected this year— the tax base has continued to shrink this year, leaving overall receipts far lower than anticipated in the 1999 budget. The 1999 budget forecast revenue of Bufr7bn ($13m) from personal income taxes, but by the end of March only Bufr400m had been received—a mere 6% of the total. Also troublingly low is income from customs receipts, which were forecast to account for Bufr15bn of a total of Bufr63bn in fiscal receipts this year.

—and there are further The current fuel shortage in Burundi is the most severe since the early days of fuel shortages the economic embargo, and the cause appears to be the lack of foreign exchange. Fuel is imported into Burundi with foreign exchange purchased at the official exchange rate, which overvalues the Burundi franc by about 35%. As a result, the purchase of fuel imports is in effect underwritten by the state, which seeks, not always successfully, to recoup its losses through retail taxes.

The currency continues to The Burundi franc’s official value has depreciated in 1999, and currently stands depreciate at Bufr554:$1 compared with Bufr510:$1 in December 1998, but the parallel exchange rate has weakened to Bufr850:$1 from Bufr750:$1 at the end of 1998. Commenting on this development, Cyprien Sinzobahamvya, the first vice-president of the Banque de la république du Burundi (BRB, the central bank), said that the worsening foreign-exchange shortage had obliged the BRB to cut back on the issuing of import licenses, which were now only being granted for strategic products such as construction materials, malt for the brewery, a few pharmaceutical products, and salt. Businessmen looking to import other goods were thus forced to turn to the parallel exchange markets for US dollars, and the resulting increase in demand had pushed up the cost of foreign exchange.

Sugar is in short supply— Despite the fact that Burundi produces sugar, it has suffered extreme sugar shortages in recent months. Ironically, production has been recovering recently, and has regained levels not seen since before 1993. The most likely cause of the shortage is therefore smuggling to Rwanda and Congo. Rwanda’s Kibuye sugar factory is not yet operational, while Congo’s productive capacity has been crippled, so there is a healthy market for imported sugar in both countries. The widening gap between the official and parallel market exchange rates for the Burundi franc makes smuggling attractive to Burundian business, since the US dollars earned from smuggling can be used to exploit the difference between the two rates. Given the severity of the current shortage, the smuggling must be of a sufficient scale to suggest official collusion at a high level, giving the lie to the government’s repeated claims that it is cracking down on corruption.

—as smuggling activity The depreciation of the currency is also squeezing the profit margins of the increases main brewery, Brarudi, at a time when it is already having to cut costs by retrenching staff, particularly in Gitega (2nd quarter 1999, page 32). This, in turn, makes smuggling Brarudi products to Rwanda and Congo, where traders are paid in dollars rather than Burundi francs, increasingly attractive, and the

signs are that this trade is growing. For the brewery, one unfortunate result of the smuggling is that beer and soft-drink bottles and crates, which are otherwise almost endlessly recycled, go out of circulation, forcing Brarudi to pay for new ones. This is an expensive business, particularly since output at Burundi’s struggling glass manufacturer, Verrundi, is falling and shows no sign of recovery.

Financing for the Despite continued optimism among government officials about the prospects Musongati nickel deposit is for the Musongati nickel deposit (2nd quarter 1999, page 25), many are in doubt beginning to doubt the ability of Australia’s Andover Resources to finance the deposit’s exploration. Andover is thought to be worth around $35m, with estimated annual revenue of $10m. Even a conservative estimate of $150m for Musongati’s development would still leave Andover a substantial financing deficit which few, if any, commercial banks are likely to want to fill. This would leave Andover with the option of issuing high-yield bonds, but it is hard to imagine that there will be much enthusiasm for these from investors, given nickel’s rather dismal prospects in the medium term.

Sofidhar is to be liquidated On June 3rd the Service chargé des enterprises publiques (SCEP), which manages the government’s parastatal portfolio, recommended the liquidation of the rural housing bank the Société de financement de l’habitat rural (Sofidhar). Sofidhar was established in November 1989 with start-up capital of Bufr300m ($2m), but ran into problems very early on, mainly because of poor loan recovery. Loan recovery had slumped to less than 50% by 1997, mainly because of the destruction of so much rural infrastructure, but also because of declining incomes in real terms and the rise in unemployment.

The Kayenzi hydroelectric In mid-June it was reported that the Kayenzi hydroelectric dam, which dam runs out of water supplies Muyinga town with electricity, had stopped functioning because of a lack of water. Angry locals accused the electricity parastatal, Regideso, of gross incompetence, saying that the problem had been getting worse for years. In 1993 the Kayenzi hydroelectric station produced 1.3m kwh, but, although this had fallen to 829,000 kwh in 1997, estimates suggest that it increased to approximately 1.4m kwh last year. Burundi produces some 85m-100m kwh of electricity per year.

Agriculture

Poor rains threaten Rains were poor in many parts of Burundi, particularly in western provinces harvests— such as Muramvya and Bujumbura Rural, in March-May, when the bulk of the rains for the year’s second (or B) season usually fall. In Bujumbura Rural there has even been talk of famine, and it has been reported that significant levels of food aid are already necessary. In Muramvya, the bean, pea, wheat and potato harvests were particularly badly hit, and officials have been trying to encourage farmers to grow drought-resistant crops, such as manioc and sweet potato, instead.

—as do army worms In mid-May it was reported that army worms had affected about 20,000 ha of agricultural land in Kirundo, Muyinga and Ruyigi, and posed a serious threat to cereal harvests there. The Burundian government has insufficient stocks of insecticide to deal with the problem, and has been counting on international agencies for assistance.

The government provides On June 16th the government announced a Bufr100m ($181,000) credit for fresh agricultural credit agricultural projects, which will be lent out at interest rates of between 10% and 12%—about 6% lower than the prevailing average lending rate.

The prospects for the The 1999/2000 coffee season is under way, and mixed signals about its 1999/2000 coffee harvest prospects are emerging from different provinces. The National Coffee are mixed Commission reported in mid-May that coffee-washing stations in Bujumbura Rural had received only 15% of the tonnage they were expecting; the commission attributed this to the serious fighting that has affected the province recently. Washing stations in Bubanza reported that they had received 50% of anticipated tonnage, while in Cibitoke the figure was a more encouraging 100%. In the Kirimiro region, which comprises Gitega, Karusi, Muramvya, Mwaro and Rutana, state-owned washing stations are predicting a 50% increase on last year’s harvest, but are unsure how much they will profit from this because of the recently established private washing stations that now compete for their business. The coffee parastatal, the Office des cultures industrielles du Burundi (Ocibu), is forecasting a harvest of 20,000 tonnes for the season, but the company believes it could have reached 30,000 tonnes if the weather had been better. Meanwhile, the National Coffee Commission has expressed concern about how much coffee is being smuggled out of Burundi to Tanzania, Rwanda and Uganda, and has offered a reward to informers of 10% of the value of coffee recovered.

Cotton production drops Figures released in late June by the cotton parastatal the Compagnie du gérance du coton (Cogerco) paint a depressing picture. Cogerco said that production in 1998/99 was an estimated 2,400 tonnes—27% less than it had predicted in late 1998 and 26% less than in the previous season (1st quarter 1999, page 39). Cogerco attributed the decline to poor and irregular rains, but acknowledged that the low prices it pays to producers were also a factor. Producers currently receive Bufr100/kg. Cogerco also reported that the area under cultivation in 1998/99 had fallen by 15% year on year, to 2,938 ha.

Foreign trade and payments

Substantial aid is Burundi’s donors, who have made the resumption of development assistance still frozen and balance-of-payments support conditional on the success of the Arusha peace talks (2nd quarter 1999, page 34), have still not detected sufficient signs of progress to resume funding. Donors have always been aware that they will have to interpret what constitutes success somewhat generously in order to unfreeze aid, but the current stalemate at Arusha seems so absolute that none of the donors has even tried to put a positive spin on it.

Instead, the World Bank and the EU, Burundi’s two major donors, have tried to tempt the Arusha participants into reaching agreement by telling them what the country would get if they managed to conclude a deal. While the World Bank has simply promised an intermediate programme lasting 18 months without mentioning any figures, the EU has promised E1.5m ($1.54m) for the peace process and E48m for social and economic rehabilitation. So far, however, none of the donors have even promised balance-of-payments support. Burundi’s foreign-exchange reserves now stand at only $65m, down $20m from this time last year, and it is this shortage that lies behind so many of the country’s other economic woes (see The economy). A donor roundtable conference has been scheduled for October in Geneva.

Although most aid is still frozen, some money has been trickling in.

• On May 10th the government launched a “good governance” project for which the UN Development Programme (UNDP) had provided $1.5m.

• On May 16th the International Fund for Agricultural Development lent Burundi $20m for a multi-sectoral programme designed to last seven years, the total cost of which has been put at $35m. The Burundian government is putting in $3.5m, and is hoping to secure the balance from other donors.

• On May 18th the Japanese government pledged $1m to the Burundi UN Trust Fund for the resettlement of refugees and internally displaced people, bringing the fund’s total for this project to $7m. The fund is looking for $12m.

• On May 28th the Chinese government promised $2.5m to repair cloth- making factory of the other cotton parastatal, Coton et textiles du Burundi (Cotebu), the hydroelectric station at Mugere, and a pharmaceuticals factory near Bujumbura. The Chinese government also pledged $4.5m to pay for a television transmitter, and technical equipment for Burundi’s international airport and various laboratories. The funds were pledged during the eighth session of the Sino-Burundian co-operation commission.

• In late June it was announced that the UN Children’s Fund (UNICEF) is ready to agree a number of projects with the Burundi government, including a water project worth $1.8m, an educational project worth $1.4m, a programme for children in distress worth $1.3m, a nutritional project worth $1.4m, and a $2m health project.

EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 Quarterly indicators and trade data 33

Quarterly indicators and trade data

Rwanda: quarterly indicators of economic activity

1997 1998 1999 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr Prices Monthly av Consumer prices 1995=100 113.9 115.2a 119.5 129.3 130.2 130.5 126.5 124.0 124.5 change year on year % 9.4 n/a 9.4 15.3 14.3 n/a 5.9 –4.1 –4.4 Money End-Qtr M1, seasonally adj Rwfr bn 48.91 51.11 50.31 54.55 49.95 51.18 47.41 54.10 52.86 change year on year % 18.6 22.1 17.3 22.7 2.1 0.1 –5.8 –0.8 5.8 Foreign trade Qtrly totals Exports fob Rwfr m 4,489 8,945 8,700 4,056 4,003 4,595 6,571 3,527 3,111 Imports cif ” 25,686 24,408 18,055 21,545 19,695 19,734 25,948 23,841 18,355 Exchange holdings End-Qtr National Bank: foreign exchange $ m 91.5 102.6 111.0 126.8 124.6 124.8 129.6 144.3 138.4b Exchange rate Official rate Rwfr:$ 307.9 299.6 302.5 304.7 307.6 312.4 317.2 320.3 342.6c

Note. Annual figures of most of the series shown above will be found in the Country Profile. a April only. b End-May, 120.0 c End-May,338.8. Source: IMF, International Financial Statistics.

Burundi: quarterly indicators of economic activity

1997 1998 1999 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr Prices Monthly av Consumer prices 1995=100 163.8 167.4 180.1 189.7 190.9 182.2 183.2 181.0a n/a change year on year % 38.0 28.3 26.7 25.0 16.5 8.8 1.7 n/a n/a Money End-Qtr M1, seasonally adj Bufr bn 49.10 47.05 48.25 50.39 49.47 48.37b n/a n/a n/a change year on year % 27.7 19.1 10.5 9.7 0.7 n/a n/a n/a n/a Foreign trade Qtrly totals Exports fob Bufr m 11,940 5,316 9,431 9,040 6,311 4,412 8,873 6,481c n/a Imports cif ” 9,844 12,476 15,038 13,310 19,583 19,954 17,428 10,698c n/a Exchange holdings End-Qtr Central bank: goldd $ m 4.37 4.13 3.91 3.75 3.82 3.68 3.75 3.66 3.57e foreign exchange “ 133.62 114.89 105.07 93.25 79.70 67.17 57.18 60.06 58.33e Exchange rate Official rate Bufr:$ 342.7 348.3 408.4 415.7 429.9 490.3 505.2 535.6 544.4e

Note. Annual figures of most of the series shown above will be found in the Country Profile. a Average for January-February. b End-August. c Total for January-February. d End-quarter holdings at quarter's average of London daily price less 25%. e End-May. Source: IMF, International Financial Statistics.

EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 34 Quarterly indicators and trade data

Rwanda: foreign trade (Rwfr m) Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Mar 1992 1993 1994 1995 1996 1997 Imports cif Food, drink & tobacco 2,708 9,713 4,047 14,098 15,848 5,354 of which: cereals & products 577 5,580 2,196 5,795 7,073 2,132 sugar & products 705 636 331 1,109 1,438 679 Mineral fuels 4,603 5,180 1,675 5,429 7,881 2,151 Animal & vegetable oils & fats 1,263 2,444 1,061 2,354 3,341 1,059 Chemicals 5,082 6,479 2,424 8,534 8,716 3,248 Paper & manufactures 1,366 1,056 385 964 1,240 537 Textile fibres, yarns, fabrics & manufactures incl clothing 3,045 2,835 963 4,124 3,538 2,193 Non-metallic mineral manufactures 802 990 275 701 1,121 287 Iron & steel & manufactures 2,499 9,270 1,193 1,725 3,093 1,050 Other metals & manufactures 1,397 1,662 619 2,649 3,555 462 Machinery excl electric 3,685 5,620 739 2,809 4,200 1,408 Electric machinery 3,202 2,413 846 3,850 2,972 1,154 Road vehicles incl tractors 2,988 9,468 1,481 7,625 12,389 2,680 Total incl others 38,434 47,866 17,366 62,193 78,189 25,689 Exports fob Coffee 4,672 5,428 2,445 11,294 13,123 1,095 Tea 2,761 2,684 834 1,119 2,845 960 Personal effects 222 340 98 7,198a 15,633a 682 Total incl others 9,139 9,766 4,056 21,929 34,388 5,116

$ m Rwfr m Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Mar Exports fobb 1994 1995 1996 1997 Imports cif 1994 1995 1996 1997 Brazil n/a n/a 82 n/a EU 6,651 20,919 30,216 9,422 Belg-Lux 4 1 1 36 of which: Germany 12 12 27 20 Belg-Lux 2,658 8,270 13,382 3,703 Pakistan 6 2 4 7 Germany 841 3,278 3,805 1,026 US 1 2 8 4 ZEP 5,641 23,118 25,641 10,299 Turkey n/a n/a n/a 4 of which: Total incl others 55 54 55 103 Kenya 2,358 14,843 15,589 5,214 UAE 170 3,699 4,761 1,057 Total incl others 17,366 62,193 78,189 25,689 a Inflated by withdrawal of UNAMIR. b Source, DOTS. Sources: Banque nationale du Rwanda, Statistiques économiques et financierès; IMF, Direction of Trade, yearbook, quarterly.

EIU Country Report 3rd quarter 1999 © The Economist Intelligence Unit Limited 1999 Quarterly indicators and trade data 35

Burundi: foreign trade (Bufr m) Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec 1992 1993 1994 1995 1996 1997 Imports cif Food, drink & tobacco 4,174 5,174 8,731 9,471 6,115 7,723 of which: cereals & preparations 2,501 3,234 4,229 5,116 2,942 4,241 Petroleum & products 5,621 6,158 7,404 6,758 5,488 4,874 Chemicals 6,543 6,997 8,242 7,394 5,395 7,520 Rubber manufactures 1,076 1,710 1,002 1,158 692 827 Paper & manufactures 1,156 1,374 1,115 1,281 1,035 1,104 Iron & steel & manufactures 3,328 3,511 3,116 2,550 1,384 1,782 Machinery excl electric 4,744 5,030 3,997 4,340 2,455 3,216 Electric machinery 3,131 3,020 3,808 4,419 3,052 2,687 Road vehicles 4,818 4,495 4,271 5,465 4,703 4,547 Scientific instruments etc 2,039 1,023 2,214 1,548 726 876 Total incl others 46,106 47,434 56,468 58,200 37,332 43,249 Exports fob Sugar 856 0 0 1 953 65 Coffee 10,033 8,838 23,710 20,175 7,642 26,979 Tea 1,899 2,146 2,741 2,400 1,641 2,972 Beer 43 98 177 803 86 12 Tobacco & manufactures 549 749 431 3 58 n/a Hides, undressed 339 206 597 525 216 47 Cotton, raw 0 794 880 425 0 0 Minerals & ores 115 204 199 275 183 n/a Cotton fabrics 359 597 255 2 7 38 Total incl others 15,355 15,019 30,034 25,982 11,293 30,561

Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Exports foba 1994 1995 1996 1997 Imports cif 1995 1996 1997 EU 11,370 9,990 2,119 n/a EU 29,346 16,977b 20,085b of which: of which: UK 7,327 1,249 1,514 8,305 Belg-Lux 8,963 5,731 7,878 Germany 2,274 999 303 6,578 France 5,851 3,196 4,068 Tanzania 253 1,249 1,211 n/a Germany 4,738 3,296 2,834 Switzerland 4,043 2,997 908 4,154 Saudi Arabia 5,154 4,893 4,145 Rwanda 505 500 908 134 Japan 3,345 2,492 2,666 Total incl others 30,067 25,975 11,202 30,764 Zambia 1,932 1,298 2,382 Kenya 2,399 1,392 1,869 South Africa 823 1,341 1,699 Tanzania 1,582 1,179 1,077 Total incl others 58,200 37,332 43,249 a Source, DOTS. b Excluding Finland. Sources: Banque de la république du Burundi, Bulletin mensuel; IMF, Direction of Trade Statistics, yearbook, quarterly.