Uganda Rwanda Burundi

COUNTRY REPORT

3rd quarter 1997

The Economist Intelligence Unit 15 Regent Street, London SW1Y 4LR United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 50 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The EIU delivers its information in four ways: through subscription products ranging from newsletters to annual reference works; through specific research reports, whether for general release or for particular clients; through electronic publishing; and by organising conferences and roundtables. The firm is a member of The Economist Group.

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Contents

3 Summary

Uganda 5 Political structure 6 Economic structure 7 Outlook for 1997-98 8 Review 8 The political scene 11 The economy 15 Agriculture 16 Manufacturing 17 Mining 17 Foreign trade and payments 18 Debt

Rwanda 19 Political structure 20 Economic structure 21 Outlook for 1997-98 22 Review 22 The political scene 26 The economy 27 Agriculture 28 Foreign trade and payments 28 Aid and trade

Burundi 29 Political structure 30 Economic structure 31 Outlook for 1997-98 32 Review 32 The political scene 37 The economy

39 Quarterly indicators and trade data

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List of tables 8 Uganda: forecast summary 38 Burundi: total humanitarian assistance for the great lakes emergency 39 Uganda: quarterly indicators of economic activity 39 Rwanda: quarterly indicators of economic activity 40 Burundi: quarterly indicators of economic activity 40 Uganda: foreign trade 41 Rwanda: foreign trade 42 Burundi: foreign trade

List of figures 8 Uganda: gross domestic product 8 Uganda: new Ugandan shilling real exchange rate 12 Uganda: monthly inflation, 1997 31 Burundi: gross domestic product

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August 21, 1997 Summary

3rd quarter 1997

Uganda Outlook for 1997-98: Rebel activities will continue to dominate the scene. The situation in the north should improve, but any improvement of relations with Sudan looks unlikely. The economy will resume a stronger growth trend. Stability will be maintained, but budget cuts will cause discontent.

Review: Rebel attacks caused further disruption in the south-west. The LRA was said to be regrouping in southern Sudan. Amnesty International criticised both the army and the rebels in northern Uganda. Contact has been maintained with Sudan but no diplomatic progress has been made. Relations with Kenya seem to be cooling again. The USA has displayed an ambivalent attitude towards Uganda. Poor harvests have put a brake on economic growth. The money supply and domestic credit remain under control. The underlying inflation situation is still good. The use of Uganda’s currency in eastern Congo has posed a threat to liquidity in Uganda. Tax collection failures have caused a revenue shortfall. The budget promised a very tight year for government spending. Tax holidays on inward investment have been abolished. VAT controls have been tightened. The stock exchange opening looks likely to be delayed again. There has been parliamentary opposition to some privatisations. Poor harvests have brought widespread famine. A new grading method for coffee could cause problems. Manufacturing performance was good overall but patchy in places. Foreign-exchange flows boosted the balance-of-payments surplus. Non-coffee exports compensated for coffee revenue, mainly because of buoyant gold exports. Transit charges have been introduced to prevent smuggling. The foreign debt has been moving towards a sustainable level.

Rwanda Outlook for 1997-98: Mr Kabila will have to get used to the Rwandan presence in Congo. The international inquiry will start soon. The low-intensity civil war will remain concentrated in the west. The International Tribunal in Arusha will ask for more funds to speed up trials. Agricultural production will improve next year.

Review: Mr Kagame has claimed that Rwandan forces led the AFDL in order to destroy refugee camps and militia, that the USA backed him and that Mr Kabila was “installed” as head of the AFDL. Rwanda’s new status in central Africa has been augmented while Mr Kagame has tried to pre-empt damaging conclusions from the eastern Congo massacre inquiry. Over 200,000 refugees are unaccounted for. The new central African alliance has enemies including emboldened militias in western Rwanda. Rwandan trials have angered human rights organisations and genocide survivors. Kenyan police have arrested key genocide suspects and transferred them to the International Tribunal, heralding improvements in Rwandan-Kenyan relations. The UN rates Rwanda as the world’s second least-developed country. The impeshi harvest has improved, but not enough to feed Rwanda’s swollen population. Food security varies according to region. Coffee production has risen slightly.

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Burundi Outlook for 1997-98: Mediators will be looking for a ceasefire if the Arusha talks get started, but absences and bad blood will cause difficulties for Mr Nyerere. If Mr Buyoya ends the massacre trials, he will need the loyalty of the armed forces. Most regrouped people will remain so for months. Bilateral donors are not yet ready to resume funding.

Review: Inclusive talks to resolve the Burundi crisis have been postponed indefinitely because of government fears of a Tutsi backlash. Uprona is split down the middle and Frodebu is deeply divided. Fighting has intensified between the factions, suggesting regroupment is losing its military impact. Pres- sure to disband the regroupment camps in building up, but to no avail. Burundi’s relations with Tanzania have deteriorated further. Coup plotter trials have been postponed while genocide trials move ahead. Fuel and export sanctions are being maintained but no longer make much difference for fuel imports or coffee exports. The 1997 second harvest is better than last year’s but there are chronic food shortages in the camps.

Editor: James Walker All queries: Tel: (44.171) 830 1007 Fax: (44.171) 830 1023

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Uganda

Political structure

Official name Republic of Uganda

Form of state Unitary republic

Legal system Based on English common law and the 1995 constitution

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

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

Head of state President, Yoweri Museveni; last presidential election was May 1996

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

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

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

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

Central bank governor Charles Nyonyintoho Kikonyogo

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Economic structure

Latest available figures

Economic indicators 1992 1993 1994 1995 1996 GDP at factor costa NUSh bn 3,627 4,072 4,914 5,637 6,306 Real GDP growtha % 8.4 5.3 10.6 8.5 5.0 Consumer price inflationa % 54.5 5.1 10.0 6.6 7.1b Populationc m 19.3 19.9 20.6 21.3 21.9d Exports foba $ m 169.3 257.1 580.8 578.6 622.3b Imports cifa $ m 522.4 655.5 1,017.8 1,141.9 1,231.3b Current accounta $ m –141.7 –-86.2 –178.4 –172.4 –221.6b Reserves excl gold $ m 94.4 146.4 321.2 458.9 528.4 Total external debtf $ m 2,647 2,637 2,999 3,387 3,443 External debt-service ratio, paid % 57.3 64.7 43.8 21.3 n/a Coffee exports ’000 tons 119 114 194 169 279 Manufacturing output index 1987=100 191.2 215.6 260.3 330.7 386.5 Exchange rate (av) NUSh:$ 1,133.8 1,195.0 979.4 968.9 1,046.1

August 18, 1997 NUSh1,090.0:$1

Origins of gross domestic product 1996a % of total Components of gross domestic product 1995a % of total Monetary agriculture 25.0 Private consumption 84.0 Manufacturing 8.4 Government consumption 9.7 Commerce 12.1 Gross fixed capital formation 17.3 Government & community services 17.4 Change in stocks –0.8 Other monetary sectors 14.0 Exports of goods & services 12.0 Non-monetary agriculture 19.1 Imports of goods & services –22.2 Other non-monetary sectors 4.0 GDP at market prices 100.0 GDP at factor cost 100.0

Principal exports 1996 $ m Principal imports 1996d $ m Coffee 396.2 Road vehicles 115.5 Gold & gold compounds 49.2 Petroleum 91.4 Fish & fish products 39.0 Medical & pharmaceuticals 46.4 Maize 17.8 Iron & steel 35.0

Main destinations of exports 1995e % of total Main origins of imports 1995e % of total Spain 22.8 Kenya 26.2 France 14.1 UK 12.1 Germany 13.9 Germany 8.0 Italy 9.5 Japan 8.0 Netherlands 8.3 India 5.5 a Fiscal years (July-June) beginning year stated; all other figures are for calendar years. b Provisional. c EIU forecasts. d UN estimates. e Based on partners’ trade returns; subject to a wide margin of error. f Government figures.

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Outlook for 1997-98

Rebel activities will The government can look forward to a relatively quiet time on the domestic continue to dominate the political front. It will be examining the local election results for signs of the scene— mood of the people leading up to the referendum on multipartyism in 2000. The problems of rebel activity will again dominate the scene. The situation in the south-west will take time to contain, because there are remote areas in which the rebels can hide, and there is continuing instability in the region as a whole. However, the rebels of the Allied Democratic Forces (ADF) operating in this region do not appear to have a political agenda and do not have serious support from the population at large, unlike the Lord’s Resistance Army (LRA) in the north of Uganda and southern Sudan.

—and the situation in the The government will be hoping that the situation in the north of Uganda north should improve continues to improve, although this will depend on developments in southern Sudan. The Sudan People’s Liberation Army (SPLA) is receiving strong backing from external sources and appears to be gaining the upper hand in its struggle against Sudanese government forces. If the SPLA continues to do well, the position of the LRA will weaken and northern Uganda could enjoy a more peaceful year. A restoration of diplomatic relations with Sudan remains a remote possibility at this stage. However, 1997 will probably see the strengthening of Uganda’s links with the new political forces in central and southern Africa and, possibly, the return of cooler relations with Kenya.

The economy will resume After last year’s slowdown, the economy is expected to recover during 1997/98, a stronger growth trend with GDP growing by about 7%. Last year’s slower growth was caused mainly by the effects of dry weather on food-crop production. If average weather conditions prevail in the coming months, food crops should recover well. It is possible that the recent dry spell will affect this year’s cash-crop output, but probably not by as much as changes in international prices. Coffee prices are expected to move downwards during the year, reducing coffee export revenue to perhaps $330m, compared with $350m last year. Non-coffee and non-traditional exports have been growing strongly (surprisingly so last year) and should continue to do well. However, it remains to be seen how long the boom in gold exports will be sustained, since much of it is re-exported and the trade depends to some extent on instability elsewhere. Exports overall will probably be slightly down next year, at $600m. Imports should grow marginally, to $1.3bn, supported by reli- able donor flows and boosted by the growth of private-sector imports associated with privatisation and rising foreign direct investment.

Stability will be Despite last year’s hiccup in government finances, caused by a significant maintained, but budget revenue shortfall, the government has shown that it is determined to maintain cuts will cause discontent macroeconomic stability and has demonstrated its commitment to monetary orthodoxy. The trend of underlying inflation is firmly downwards in the short term and as the problem of high food prices is unlikely to be repeated this year the headline rate should fall towards the target figure of 5%. However, rumbles of discontent can be expected from some sections of the population as this year’s tight budget cuts into government spending. The primary education initiative will be popular, as long as the government can provide the finance to

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mobilise it effectively, but many civil servants will be unhappy with the government’s decision not to increase their salaries. This will make it more difficult to take effective action against corruption and smuggling, insofar as it requires the cooperation of the public-sector workforce.

Uganda: forecast summarya ($ m unless otherwise indicated) 1995/96b 1996/97b 1997/98c 1998/99c Real GDP growth (%) 8.5 5.0 7.0 6.0 Consumer price inflation (%) 6.6 7.1d 5.0 6.0 Merchandise exports fob 579 622d 600 600 of which: coffee 396d 350d 330 300 Merchandise imports cif 1,142 1,231d 1,300 1,350 Current-account balance –172 –222 –200 –200 Average exchange rate (NUSh:$) 1,013 1,055c 1,100 1,155

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

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

100 8 NUSh:$ 90 6

4 80 NUSh:DM

2 70

0 NUSh:¥ 1994 95 96 97(b) 98(b) 60

(a) Fiscal years starting July 1. (b) EIU forecasts. (c) Nominal exchange rates adjusted for changes in relative consumer prices. Sources: EIU; IMF, International Financial Statistics; World Economic Outlook. 1990 91 92 93 94 95 96 97 98

Review

The political scene

Rebel attacks cause Rebels of the Allied Democratic Forces (ADF) have again been active in the far further disruption in the south-west of the country and the Ruwenzori National Park has been closed south-west— because of security problems. In June a force unofficially put at 500-600 men crossed into Uganda from the Democratic Republic of Congo (formerly Zaire) and occupied the town of Bundibudgyo. The town was briefly held and looted before the rebels were driven out, breaking up into smaller bands. Police and government buildings were subsequently targeted in other settlements in the region. The rebel activities resulted in the deaths of several scores of civilians and tens of thousands were temporarily displaced. According to reports, the authorities had received intelligence of a rebel attack, but were duped into defending the wrong sector of the border. The incident represents an

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embarrassment rather than a defeat for the Ugandan Popular Defence Force (UPDF) and senior local commanders have been disciplined for incompetence.

Uganda: rebel activity

ADF: Allied Democratic Forces, amalgamation group of rebels active in south-western Uganda UPDF: Ugandan Popular Defence Force, the government army NALU: National Army for the Liberation of Uganda, one of the oldest rebel groups, forms the core of the ADF WNBF: West Nile Bank Front, rebel group formerly active in Congo but defeated and scattered further east in early 1997 LRA: Lord’s Resistance Army, largest rebel group, led by Joseph Kony, active in the north of Uganda and southern Sudan SPLA: Sudan People’s Liberation Army, a southern Sudanese rebel group, led by John Garang, which has cooperated with the UPDF against various Ugandan rebel groups

—and the region The government must nevertheless be worried about the resurgence of armed is suffering from resistance in the south-west because the ending of the Mobutu regime in wider insecurity Congo should have deprived the rebels of crossborder support. The ADF is a diverse group, and the authorities are said to be baffled about the composition of its Ugandan element and its political aims. The core of the ADF derives from the National Army for the Liberation of Uganda (NALU), which has been operating in the remote Ruwenzori region for some years, together with a more recent Islamic fundamentalist Tabliq element and, possibly, some remnants of the West Nile Bank Front (WNBF) forces now driven from their territory in the north. These Ugandan rebels appear to have formed the focus of attraction for additional elements of former Zairean soldiers loyal to Mr Mobutu and Rwandan Hutu rebels. The ADF does not appear to identify with any political opposition movement within Uganda and its existence may be best explained in terms of the general instability which has gripped the Great Lakes region, of which south-west Uganda is a part. The defence forces should be capable of dealing with this problem, but Uganda’s rebel movements are notoriously hydra-headed and it will take time.

The LRA is said to be The north of the country continues to suffer from the attacks and kidnappings regrouping in southern of the Lord’s Resistance Army (LRA), although the intensity of its operations Sudan has been significantly reduced since the setback it suffered at the hands of the Sudan People’s Liberation Army (SPLA) in April. The LRA has extended the sphere of its activities eastwards, with some incidents reported in Karamoja, although most of its raids still take place in the Gulu area, especially on its regional road links. The main forces of the LRA have reportedly regrouped in new camps in southern Sudan, south of Juba, from where it intends to mount a counter-offensive. According to Ugandan military sources, the strength of the LRA within Uganda has fallen to about 400 men. The fate of the LRA is clearly linked to the outcome of the civil war in Sudan and there have been rumours that a large-scale military offensive against Sudanese government forces is to be launched simultaneously from Congo, Eritrea, Ethiopia and Uganda. The

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president, Yoweri Museveni, and the SPLA leader, John Garang, are reported to have met secretly with Nelson Mandela, the president of South Africa, which has been supplying arms to the SPLA through Uganda.

Amnesty International The London-based human rights group Amnesty International, in its latest criticises the army and the report on the situation in northern Uganda, has blamed both government rebels in the north forces and the LRA for human rights abuses. Amnesty concedes that the army’s record has improved since its last report, except in the case of rape, which is still at a serious level. Fewer mass abuses by the military were found, but suspected rebel collaborators were often badly treated. Amnesty believes that, while many officers want to keep their men under control, a great deal of indiscipline goes unpunished. The report is much more critical of rebel behav- iour, including “hundreds of deliberate and arbitrary killings of civilians, including refugees”.

There has been contact According to Uganda’s minister of state for foreign affairs in charge of regional but no diplomatic cooperation, Rebecca Kadaga, in an interview given to The East African, no progress with Sudan progress has been achieved on the diplomatic front between Uganda and Sudan. Mr Museveni has yet to be convinced that there has been a genuine change of heart on the part of Sudan’s president, Omar Hassan Ahmed el- Bashir, since their meeting in Kenya last May (2nd quarter 1997, page 11). He cites the failure of the Sudanese authorities to bring about the return of a group of Ugandan schoolgirls abducted by the LRA and held in Sudan. Uganda is holding more than 100 Sudanese soldiers, captured with LRA rebels, until the girls have been returned. Mr Museveni showed his displeasure with Sudan by boycotting a meeting of the Intergovernmental Authority on Development (IGADD), set up by the Kenyan government in Nairobi, at which the Sudanese problem was discussed. He has also rejected an offer from the LRA to return the girls on condition that he calls a ceasefire in the north.

Relations with Kenya Uganda’s desire to play a more central part in regional affairs could lead to a seem to be cooling again— deterioration in its relations with Kenya, which have tended to fluctuate between satisfactory and poor. Uganda has traditionally been dependent to an unhealthy extent on its commercial outlet through Mombasa and Mr Museveni has been seeking to reduce this dependence since he came to power in 1986. Trade links through Tanzania have been improved, but Lake Victoria will always present an obstacle. The possibility now arises of a road link westwards through Congo (see Rwanda; Foreign trade and payments). Any significant reduction in Uganda’s trade with Kenya would have serious consequences for the Kenyan business community. Moreover, personal relations between the Ugandan and Kenyan presidents seem to be getting worse again after a relatively amicable period. Uganda protested, in July, at the holding of more than 100 Ugandan nationals in Kenyan jails. Mr Museveni’s absence from the IGADD talks on Sudan must have been seen in part by the president of Kenya, Daniel arap Moi, as a personal snub. Mr Moi, unlike Mr Museveni, is also increasingly seen as isolated from the new generation of African leaders in the region. Mr Moi must also resent the extent to which the donor community has forced his hand in domestic politics, in contrast to the hands-off approach accorded to Uganda.

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—and the USA displays an The establishment in June of a permanent electoral commission, under the ambivalent attitude chairmanship of Aziz Kasujja, was presented by the authorities as a landmark in the development of a democratic political culture under the new constitution. The first job of the commission will be to oversee the forthcoming local elections. However, the banning of political parties continues to inflame the passions of opposition groups and to attract criticism from abroad, especially from the USA. In July the US ambassador, Michael Southwick, who has served for three years, returned to this theme in an interview reported in the government newspaper New Vision. He wanted the rights of political association to be restored as soon as possible and said that the USA would not contribute towards the costs of holding the referendum on multipartyism due in 2000. In addition, he did not believe that the 1996 presidential elections had been free and honest and saw the outcome as “transitional”. Despite this, the USA views Uganda in a commendable light in other respects, sending a team of its Green Berets in July to train Ugandan soldiers in methods of crisis management and maintaining peace so that they can be deployed as required elsewhere in Africa.

The economy

Poor harvests put a brake The economy grew by a modest 5% in 1996/97. This compares with 8.5% on economic growth during the previous year and an average of 6.5% for the last decade. The slower growth in output was apparent virtually across the board, though the most significant slowdown was in agriculture, which makes up 44% of GDP and which increased by only 1.1% overall. Growth in the monetary sector of the economy was generally buoyant, at 6.9% (compared with 10.8% in the previous year), but the non-monetary sector is estimated to have contracted by 0.7% (compared with an increase of 1% in the previous year). The non- monetary sector has generally been sluggish in recent years, but it still contrib- utes nearly one-quarter of GDP. It is especially important in agriculture, where subsistence production accounts for about one-fifth of total GDP and nearly two-fifths of agricultural GDP. The relatively poor performance of agriculture in 1996/97 was mainly due to a drop in food-crop production of 2%, mostly in the subsistence sector, caused by prolonged dry weather. Slower growth was also markedly evident in commerce, which accounts for about 12% of GDP, and which grew by only 2.8% in 1996/97 compared with 11.1% in the previous year. The authorities say that this was caused by a fall in disposable incomes resulting from lower coffee export revenue.

The money supply and Despite the slowdown, other aspects of the economy remained in good order domestic credit remain during 1996/97. The money supply (currency circulation and demand depos- under control— its) is estimated to have grown by about 11%, compared with about 14% during the previous year. Domestic credit grew very modestly, by about 3%, compared with 71% in 1995/96. Private credit was again the main contributor, but at a lower rate of increase of about 9%, compared with 29% in the previous year. Monetary policy was guided principally by the need to contain the appreciation of the shilling, caused by strong inflows of foreign exchange, and to keep a check on inflation, which remained in single figures throughout most of the year. The government says that the structure of private-sector financial portfolios has gradually been changing as more savings are being kept in the

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banking system. This is thought to reflect a growing public confidence in holding the shilling. The ratio of financial savings (time and savings deposits) to the broad money supply increased to 33.7% in 1996/97 compared with only 12% in 1988/89. This has occurred despite the relatively poor rates of interest which are offered.

—and the underlying The inflation record during the year 1996/97 was generally encouraging, inflation situation is still despite sharp increases near the end of the year. At the end of the previous good financial year the annual rate of headline inflation (ie all items) was 5.4%. The rate remained in single figures throughout the following months, but rose to over 9% in September and October, before falling to a record low (year-on-year) of 3.2% in February. After that it increased sharply, breaking into double figures, and reaching 11.8% in May. The fluctuations were almost entirely caused by sharp variations in food crop prices, which make up about a third of the Uganda: monthly inflation, 1997 weightings of the index. The record of other goods and services (underlying % change, year on year inflation) is very good, with the annual rate falling back during the year and 12 reaching 1.9% in May. In average terms, the headline rate for 1996/97 (to May) 11 of 7.5% was made up of an average rate of 15.1% for food crops and 4.6% for 10 all other goods and services. The explanation for the fluctuating—and some- 9 times high—rate of food crop inflation lay in the impact of unseasonable 8 drought conditions throughout the country. The lesson that the government 7

6 has learned is that it must make greater efforts to ensure food security and

5 improve the food distribution system. Meanwhile, it says that it will continue

4 to combat inflation, whatever its source. During the past year, when inflation

3 began rising, the government cut back its spending to reduce demand, increased its fiscal savings with the banking system during the second quarter Jan Feb Mar Apr May Jun Jul and required the Bank of Uganda (the central bank) to increase the issue of Sources: EIU. Treasury bills.

The use of Uganda’s The exchange rate of the shilling continues to be relatively stable. The average currency in eastern Congo interbank rate in 1996/97 was NUSh1,055:$1, compared with NUSh1,012:$1 poses a threat to liquidity during the previous year, a depreciation of about 4%. During the opening months of the current financial year the rate slipped a little further to NUSh1,090:$1 in mid-August. Despite a fall in coffee exports, the flow of foreign exchange into Uganda increased during 1996/97, because the coffee shortfall was more than compensated for by rising sales of other exports and increased transfers. The central bank intervened to purchase $40.2m during 1996/97 in order to reduce inflationary pressures, and this policy has continued into the current year. A new threat to currency stability has emerged since the change of regime in Congo. With the opening up of Congo’s eastern region to Ugandan businessmen, billions of Ugandan shillings are being used as legal tender. Remit- tances in Ugandan shillings have increased by 70% in Uganda’s western region in recent months and some reports suggest that as much as a third of Uganda’s currency in circulation has found its way over the border. There is growing concern that this will cause liquidity problems in Uganda and there is an increasing problem with forgeries. The authorities are also having to cope with a reduction in the life of currency notes which are in such strong demand. A new note worth NUSh20,000 ($18) is likely to be issued before the end of the year, with a NUSh50,000 note under consideration for next year.

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Tax collection failures In contrast to the generally satisfactory performance of the macroeconomy cause a revenue shortfall during 1996/97, government finances saw a serious shortfall in revenue. The finance minister, Jehoash Mayanja-Nkangi, addressed the issue in his budget speech in June. The 5% shortfall amounted to NUSh43bn ($41m), out of an expected total of NUSh776bn ($735m). According to the minister, it was caused by undercollection of import taxes, big losses due to fuel-smuggling and disappointing performances with value-added tax (VAT) and excise duties. Disruption caused by troubles along the western border and in the north were also held to have caused collection problems, but the main explanation lay in a deterioration in tax compliance. The problem was also dealt with by the secretary to the Treasury, Tumusiime Mutebile, in evidence given to a parliamentary committee on the national economy. He talked of incompetent tax administration and increased smuggling of goods by criminals in collusion with revenue officers and said that the government was going to be “ruthless in forcing the Uganda Revenue Authority to clean house”. The problem has to be seen against a traditional culture of non-payment of taxes and widespread corruption. It is apparent also in the case of income tax, which makes up only about 12% of government revenue, and which is characterised by widespread evasion except by those who have no choice under pay-as-you-earn (PAYE). In spite of the disappointing performance of VAT in revenue terms, partly because of gross underregistering, the government is generally pleased with the first year of its operation, given the initial problem of the traders’ strike, and makes a favourable comparison with the experience of Ghana, where VAT had to be withdrawn.

The budget promises a The 1997/98 budget contained no dramatic changes and no significant new very tight year for directions in the government’s economic policy. Its main thrust was to reinforce government spending— the policies adopted in recent years and to maintain the government’s reputation for sound financial management. It had to take account of the previous budget’s revenue shortfall and this year promises to be a very difficult one for government finances. Total revenue collection for the year is estimated to be NUSh840bn, with expenditure at NUSh922bn, including recurrent expenditure of NUSh800bn. The government is depending on improved administration and economic growth of 7% to deliver its revenue, and Mr Mayanja-Nkangi warned in his budget speech that additional measures might be needed during the year. Moreover, the slowdown in revenue collections has accompanied exceptional pressures for more spending. In these tight circumstances the government has identified four priority areas for spending: debt repayment, other statutory payments, local election funding and the provision of free primary education for up to four children per family (which was an election commitment). The only other area of increased spending this year will be privatisation, because it is the government’s main strategy for achieving the modernisation of the economy. All other government spending will be severely limited, with deep cuts of up to 30% in some non-wage areas. There will be no wage increases this year for civil servants and there will be no additional civil servant recruitment.

—as tax holidays on The budget introduces long-term measures relating to tariff reform and trade inward investment are liberalisation designed to reduce the anti-export bias in the economy. All 30% abolished— import duties (on non-Common Market for Eastern and Southern Africa— COMESA—goods) have been reduced to 20%, with excise surcharges

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harmonised at 10%. Import bans are to be phased out, beginning with beer, soft drinks and batteries in April 1998. Tax holidays on inward investments have been abolished, because the government decided that they were being abused, and replaced with a uniform corporation tax rate of 30% with what are claimed to be generous depreciation allowances. The drinks industry was sin- gled out for encouragement by a reduction in excise duties from 55% to 30% for soft drinks and 70% to 65% for beer. The problems arising from high fuel costs are recognised in a 10% reduction in duties, which nevertheless leaves the tax on petrol at 215%. Vehicle licence fees have been raised by a further 20%.

—and VAT controls are Given the difficulties experienced last year, the VAT penalties are to be more tightened strictly enforced in the future, and qualification for the plant and machinery depreciation scheme will depend on a clean VAT record. However, in recogni- tion of the difficulties which some companies have been having over their VAT payments, the period for VAT refunds has been cut from 60 to 30 days in order to ease cash-flow problems. Interest will be paid on late refunds at 5% above the central bank’s official rate.

The stock exchange The opening of the stock exchange in Kampala looks likely to be delayed until opening is delayed again November. There is even speculation that the exchange may fail to secure a group of companies to list and that it will prove to be an unviable enterprise in such an immature economy as Uganda’s. Those members of the public who are keen to participate are hoping to be able to buy into some of the more attractive parastatals due for privatisation, such as the Uganda Commercial Bank (UCB), the Grain Milling Company, and Uganda Posts and Telecommunications. How- ever, it is accepted that the suitable preparation of company accounts and prospectuses will take time. The plan to kick-start the stock exchange with dealings in Treasury bills does not appear to have been successful, with public participation in the weekly auctions estimated at only 1% or 2% of the population.

There is parliamentary It was made clear again in this year’s budget speech that the government is opposition to some determined to press ahead with its privatisation policy as quickly as possible. privatisations According to information in this year’s Background to the Budget, some 63 public enterprises had been divested as follows: 19 asset sales, 15 share sales (including a debt-equity swap, seven auctions, four joint ventures, one lease, three repos- sessions and 14 liquidations. The government is not having the argument all its own way and a powerful lobby against some of the larger privatisations is being mounted, especially by opposition MPs. They claim that national assets are being sold off to foreigners, who then get expatriates to run them, depriving local people of jobs. The argument is also being pressed that in the case of some of the larger parastatals there is an important obligation to the public to be considered. These points are well illustrated in the case of the UCB, which looked all set for privatisation until some MPs expressed their concern that rural people might lose their banking facilities. UCB controls more than 60% of the banking sector and is the only bank with a countrywide network of branches, many of which probably run at a loss, and would be under threat of closure by a new owner concerned with profitability. In an unprecedented move, the MPs succeeded in blocking the privatisation until the government

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presented a clear policy on rural banking. Faced with this strength of opposition, the government has offered to provide subsidies to keep rural branches open. A similar parliamentary defeat has delayed the separation of Uganda Posts and Telecommunication into two separate units prior to privatisation.

Farmers hope for a review Commercial farmers who owe money to the UCB have enlisted the support of of the UCB loan recovery the vice-president, Specioza Kazibwe, in their attempts to prevent their assets policy being auctioned. The recovery of the loans is a precondition set by the World Bank for assistance towards the financial sector reforms and was to be carried out by the Non-Performing Assets Recovery Trust. The US firm employed by the government to recover the money, Labat Anderson, has so far only col- lected less than half the outstanding NUSh101bn. Many of the defaulters are politicians and senior military people. Farming interests want the policy re- viewed and are hoping that they will be required to pay only the original loan, not the accumulated interest. They also claim that UCB was partly responsible for their failure to repay the loans because it did not provide inputs and exten- sion services as promised.

Agriculture

Poor harvests bring Agricultural production during 1996/97 was adversely affected by drought con- widespread famine ditions during the last quarter of 1996 and the first quarter of 1997, growing by an annual rate of 3.9%, compared with 8.6% during the previous year. The effect was mainly felt in food crops, which dominate the agricultural sector, accounting for 71% of agricultural GDP and 92% of the total cropped area, and output declined by 2% in 1996/97 (mainly in the subsistence sector). The fall in food-crop production brought famine to more than half the population and affected 21 districts, especially in the north, north-west and south-west, all areas where the situation was worsened by large refugee populations. Food- crop shortages drove up prices to a ten-year high, but they started to decline following the onset of heavy rains in April. The unfavourable weather had less effect on the traditional export crops because the dry spell mainly came at the end of the cash-crop season. Cash-crop production increased in 1996/97, by 14.2%, compared with 22% the previous year. However, the cash-crop sector is dominated by coffee, and the export value of coffee in 1996/97 was $350m, compared with $396m in the previous year.

Coffee prices are set to The possibility of an improvement in global coffee prices in the short and continue falling— medium term remains slim. Global supplies of coffee are forecast to increase this financial year and next, and even more in the longer term, as the higher returns from recent price surges boost plantings. By 1998/99 the EIU expects that global exportable production will exceed 80m 60-kg bags for the first time. The recent bullish mood in the coffee market was almost entirely attributable to tight supplies of arabica coffee, coupled with low roaster stocks and significant speculative involvement. Heavy selling may be expected as soon as the danger of frosts in Brazil has passed. Consumer stocks have also begun to recover and are thought to be 3m-4m bags above the 1996 level, which was the lowest for 20 years. The Association of Coffee Producing Countries (ACPC) has pledged to continue its attempts to defend prices and has even set quotas, but

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its influence will be marginal. Average prices for robusta coffee (Uganda’s main variety) are expected to fall by about 9% in 1998 to 76 cents/lb, compared with 84 cents/lb in 1997.

—and a new grading There are concerns that a new quality-grading method of testing for mould, method could cause introduced by the leading London broker LIFFE, could adversely affect the problems prices obtained for Ugandan coffee. The new testing method is more rigorous than the old method and might make it possible to allow low-quality coffee from producers such as Vietnam on to the market. The effect would be to flood the market and force prices down. Large quantities of coffee that have already received a LIFFE three-year quality certificate will have to be re-tested. If they fail they will have to be regraded at an estimated loss of $50 per ton. The new quality test was introduced on health grounds.

Manufacturing

Manufacturing Provisional estimates suggest that the manufacturing sector grew by 14.2% performance is good during 1996/97, compared with 19.7% in the previous year. The average an- overall but patchy nual increase during the last ten years was about 13%. This is a good performance, though manufacturing’s share of GDP is still only 8.3%. The government hopes that the privatisation of manufacturing parastatals will boost this sector’s share of the economy. The performance of the subsectors has fluctuated considerably since the index of industrial production was started in 1987. The best record has been in bricks and cement and miscellaneous manufacturing (especially plastic products), both of which had grown by more than six times up to 1996. Timber and paper, and chemicals, paint and soap (especially paint) expanded output more than five times during the period, with steel and steel products and food processing expanding more than four times. The worst performance has been in textiles and clothing, where output shrank to less than half of what it was in 1987, with a 23% drop in 1996 alone. A similarly poor performance characterised leather and footwear until 1993, but this sector had recovered rapidly during the last three years and output expanded by 76% in 1996 alone. The most heavily weighted subsector in the index, drinks and tobacco, expanded by more than three times between 1987 and 1996, and by 20% in 1996 alone. The second most heavily weighted subsector, food processing, grew steadily during the period and by nearly 15% in 1996. The most dynamic part of food processing has been sugar production, following the restoration of capacity at the three factories at Lugazi, Kakira and Kinyara.

Local manufacturers are According to a feature on manufacturing in Uganda published in The East unhappy with the African weekly, conditions under which new businesses will have to operate are business environment unlikely to encourage the kind of industrial expansion that the government is looking for. Manufacturers are particularly critical of the high costs of doing business and the poor standard of public utilities, with the demand for electricity far exceeding supply. Despite the rehabilitation of the Owen Falls power station, the supply of electricity is considered to be far too unreliable. Manufac- turers complain that the load-shedding schedules drawn up by the Ugandan Electricity Board (UEB) are not always followed and many have been forced to install expensive generators. The poor condition of many roads is cited as

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another problem, pushing up distribution costs. The replacement of tax holidays with depreciation allowances in this year’s budget has also come in for criticism, manufacturers claiming that the old system provided better advan- tages. The reduction in import duties for non-COMESA imports was not wel- comed because it will make high-cost Ugandan businesses less competitive.

Entebbe Airport fails a Entebbe Airport has failed a quality test because it lacks cooling facilities for storage quality test fish, and the country risks a ban on its fish exports if a suitable plant is not installed within one year. This is a serious setback coming so soon after the temporary ban placed on exports of fish from East Africa to the EU following the discovery of salmonella in some shipments. Inspectors have been touring installations throughout East Africa to make sure that standards of hygiene are up to EU standards at all stages of processing and transportation. Fish exports have been earning Uganda more than $100m per year and fish processing was seen as a very promising sector of the food-processing industry.

Mining

The cobalt project is ready An agreement which puts together a financial package for the Kasese cobalt to start—at last project was signed in London in June and will provide $66m for disbursement, probably beginning in September. An earlier attempt to finance the project just failed in 1996 and since then the Commonwealth Development Corporation has dropped out and Standard Bank of South Africa has stepped in. The bank will put up $20.2m, Proparco $16.8m, the International Finance Corporation (IFC) $16m and the European Investment Bank (EIB) $13m. The $110m cap- italisation of the operating company, the Kilembe Cobalt Company, will be financed by Banff Resources, the state-owned Kilembe Mines, IFC and Proparco. Private Ugandan investors will take an 8% interest. The project, which has been many years in the making, expects to produce 1,000 tons of cobalt per year from the tailings of the old Kilembe copper mine. Production is now expected to begin in the fourth quarter of 1998.

Foreign trade and payments

The balance-of-payments The balance of payments improved in 1996/97, with the overall surplus in- surplus is boosted by creasing to $109m, compared with $19m in 1995/96. The foreign exchange foreign exchange flows reserves also increased during the year and were estimated at $626m at the end of June, equivalent to more than four months of imports. The increased strength in the payments position apparently resulted from increased flows of foreign exchange to the capital account due mainly to rapidly growing direct investment. However, the increase in investment is partly explained by a different method of accounting and is partly compensated for by a corresponding drop in current private transfers. Total inflows of foreign currency increased in 1996/97, by 10.5% to $1.8bn, compared with $1.63bn in 1995/96, and 82% of these funds were in the private sector. Foreign direct investment (FDI) in 1996/97 amounted to $160m.

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Non-coffee exports The trade deficit (goods and services) in 1996/97 was virtually unchanged at compensate for falling $876m, compared with $875m in the previous year. Imports (including serv- coffee revenue— ices) were slightly higher, at $1.65bn, compared with $1.6bn in the year before, but the difference was more than offset by an increase in total exports (including services) of 7% from $725m to $776m. Merchandise imports were also slightly higher, at $1.23bn, compared with $1.14bn in the previous year. Cof- fee exports were sharply down in 1996/97, by 13%, to $350m, compared with $396m the year before, because of lower market prices, but non-coffee exports were exceptionally buoyant, increasing by 46% from $186m to $272m. Non-oil imports have been increasing steadily over a number of years and in 1996/97 they reached $917m, equivalent to 74% of all merchandise imports. As a result of these various changes, the current-account deficit was marginally less in 1996/97, at $222m, compared with $172m in the previous year.

—mainly because of Merchandise exports were up by about 5% in 1996/97, to $622m, compared buoyant gold exports with $579m in the previous year. As was explained above, this performance was the result of a big increase in non-coffee exports, the data on which are incomplete. Coffee, tea and tobacco exports were all up on the previous year, by about 25% overall, to $43m. Fish exports increased by 11% to $41m, hides and skins by 15% to $10m, and cereals and beans by 51% to $26m overall. However, the most important item, increasing by 70% from $86m to $146m was “others”, which are not specified, but which almost certainly consist of gold and gold compounds. In 1996/97 this item made up by about 23% of all merchandise exports.

Transit charges are Uganda has introduced a cash guarantee requirement on selected goods in introduced to prevent transit in an attempt to stem the steep increase in the quantities of untaxed or smuggling substandard goods which are being smuggled in and dumped on the local market. The cash is returned once the goods have cleared the country. The requirement applied initially only to fuel, but was extended to include sugar and cigarettes, and has already resulted in trucks being stranded at the border after failing to provide the money. Importers and clearing agents have protested that the charges contravene the spirit of free movement within COMESA and have complained that the charge is too high. The authorities, though, are determined to take a strong stand on smuggling, which has caused large revenue losses.

Debt

The foreign debt is Following the various debt relief initiatives that have been taken, Uganda’s debt moving towards a is moving towards a sustainable level. At the end of 1996, the total external debt sustainable level stood at $3.6bn, including some $2.7bn to multilateral institutions compared with $3.5bn one year earlier. The new debt has been taken on at highly conces- sional rates. The total debt stock is now about 60% of the GDP, compared with 80% in 1993/94. The ratio of debt service to exports of goods and services has been declining steadily and was estimated at 17% at the end of 1996. This compares with a ratio of 50% at the end of 1993. The position will improve still more when the Heavily Indebted Poor Countries (HIPC) debt initiative takes effect beginning in April of next year. IMF officials visited Kampala in August to continue discussions on a new three-year programme for Uganda.

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Rwanda

Political structure

Official name République Rwandaise

Form of state Unitary republic

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

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

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

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

National government Self-appointed in July 1994, and consisting of ministers from the RPF, MDR, PSD, PL and PCD; last reshuffle March 1997

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 chrétien démocrate (PCD); Parti libéral (PL); Parti social démocrate (PSD)

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

Key ministers Agriculture, environment & rural development Augustine Iyamuremye (PSD) Civil service & labour Joseph Nsengimana (PL) Commerce Bonaventure Niyibizi (independent) Communications Charles Ntakirutinka (PSD) Education Joseph Karamera (RPF) Family & women’s affairs Aloyise Inyumba (RPF) Finance Jean-Berchams Birara (independent) Foreign affairs Anastase Gasana (MDR) Health Vincent Biruta (PSD) Information Jean-Nepormuscene Nayinzira (RDC) Interior & community development Abdulkarim Habimana (RPF) Justice Faustin Nteziyayo (independent) President’s office Patrick Hazimpaka (RPF) Public works Laurien Ngirabanzi (MDR) Tourism Marc Rugenera (PSD) Youth Jacques Bihozagara (RPF)

Central bank governor François Mutemberezi

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Economic structure

Latest available figures

Economic indicators 1992 1993 1994 1995 1996 GDP at market prices Rwfr bn 218.6 208.9 165.1 323.7 n/a Real GDP growth % –3.2a –10.0a–49.0 24.6 13.3 Consumer price inflation % 9.5 12.4 n/a 99.0b 7.4 Population m 7.36 7.55 7.80 8.00 n/a Exports fob $ m 68.5 67.7 27.0c 56.2 60.5 Imports fob $ m 240.4 267.7 80.2c 165.2 164.2c Current account $ m –83.3 –128.9a n/a n/a n/a Reserves excl gold $ m 78.7 47.5 32.0 125.8 154.8 Total external debt $ m 849 890 931 1,008 n/a External debt-service ratio, paid % 20.7 11.3 4.0 12.9 n/a Green coffee productiond ’000 tons 38.8 29.2 1.8b 21.8b 15.4 Exchange rate (av) Rwfr:$ 133.4 168.2 150.0c 262.2 306.8

August 18, 1997 Rwfr309.0:$1

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

Principal exports 1996 $ m Principal imports 1995 $ m Coffee 42 Motor vehicles 29 Tea 9 Petroleum & petroleum products 21 Cassiterite (tin ore) 1 Electrical equipment 15

Main destinations of exports 1995e % of total Main origins of imports 1996e % of total Brazil 45.5 Kenya 19.3 Belgium-Luxembourg 14.3 Belgium-Luxembourg 17.5 Germany 7.8 Uganda 7.3 Netherlands 7.8 United Arab Emirates 6.3 UK 1.9 Tanzania 4.4 a World Bank estimate. b Average for 1994-95. c EIU estimate based on World Bank data. d Crop years (April-March) starting in year stated. e Based on partners’ trade returns; subject to a wide margin of error.

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Outlook for 1997-98

Mr Kabila will have to get The president of the Democratic Republic of Congo (formerly Zaire), Laurent used to the Rwandans Desiré Kabila, cannot have enjoyed the highly public claim of the Rwandan vice-president, Paul Kagame, that Rwanda ensured his victory over the former president, Mobutu Sese Seko. Neither can Mr Kabila refute it as long as Rwandan troops remain in his country, particularly in Kinshasa. He needs the troops in order to stay in power and neither he nor the Rwandan government can risk withdrawing them. Military assistance from around the region may help spread the load and the Rwandan presence could be rendered more discreet, but it will still be required, despite strong anti-Tutsi sentiment in Kinshasa.

The international inquiry Officials to conduct the international inquiry into massacres in eastern Congo will start soon are soon to arrive in the country. The inquiry will concern itself with events from 1993 onwards, rather than 1996 alone. It is, therefore, more likely to apportion blame fairly evenly between the former Rwandan army, Rwandan militias and the former Zairean army on the one hand, and the Alliance des forces démocratiques pour la libération du Congo-Zaïre (AFDL) and the Rwandan Patriotic Army (RPA) on the other. If it does so, that will be good news for the Rwandan state, which is less likely to suffer western aid cuts as a result.

The low-intensity civil The fighting between the RPA and Hutu militia in western Rwanda, which may war will remain fairly be termed a low-intensity civil war, is set to continue. The militia would concentrated in the west like to spread the conflict countrywide and to show a capacity to strike fairly often at Kigali, but will be forced to restrict most attacks to Ruhengeri, Gisenyi and Kigali Rural prefectures for the time being. More attacks and reprisals similar to the August massacre of Tutsi refugees at Mudende camp are expected in the coming months.

The International The renewed attention on the International Tribunal for Rwanda, generated by Tribunal will ask the recent arrests in Kenya of nine main genocide suspects, will also generate for more funds comment on how long the trials already under way are taking. The delays are being caused by adjournments to gather evidence that should have been completed before the trials began. While stricter adjudications from the tribunal judges in their granting of adjournment applications would be one solution, tribunal officials will also be pushing donors to increase the funds available to legal teams to research their briefs.

Agricultural production Far fewer refugees will return during 1998 than this year, as most are back will improve next year already, which will mean fewer disruptions to farming and a bigger crop next year. The first harvest in January may not be particularly impressive, but if the rains cooperate and the humanitarian agencies pursue the input delivery pro- grammes they are currently embarked on, the second harvest in June could well be good. In the meantime, Rwandans face food shortages and malnutrition, though the World Food Programme (WFP) should be able to help with funds to relatively safer areas.

Building a regional road If a road is built between Kisangani/Stanleyville in eastern Congo and Rwanda will be a risky business and Uganda, as is now being proposed by the presidents of the three countries,

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life will be greatly improved for many ordinary people in the region, not least the many traders who currently ply the impossibly bad route. However, given the continued fighting in the region, it would take a brave contractor to build the Congo stretch right now, no matter how persuasive the security guarantees provided by the regional leaders.

Review

The political scene

Mr Kagame claims that Rwanda’s vice-president and minister of defence, Major-General Paul Kagame, Rwandan forces led the has confirmed that Rwandan forces enabled Laurent Desiré Kabila to oust AFDL— Mobutu Sese Seko as president of the Democratic Republic of Congo (formerly Zaire) on May 17. Mr Kagame had always previously denied this. Mr Kagame made the claims in interviews given to the Washington Post and to the South African Mail & Guardian, published on July 9 and August 8 respectively. Mr Kagame said that Rwandan Patriotic Army (RPA) mid-level commanders led the Alliance des forces démocratiques pour la libération du Congo-Zaïre (AFDL) and that although most of the fighters were Congolese, the RPA were deployed, “when there was a need for things to happen in a precise way”. Their heaviest battle was against soldiers from the União Nacional para a Independência Total de Angola (UNITA) in Kenge, 160 km east of Kinshasa, after which they marched on to the capital in May rather than take chances by leaving it to the Congolese.

—in order to destroy the RPA units first worked together with the Banyamulenge militia in early 1996 refugee camps and former (4th quarter 1996, page 24), impressing other Zairean liberation groups with Rwandan militia their spectacular successes against the Zairean army, successes which had con- sistently eluded the liberation groups since the 1960s. The RPA’s mission was to dismantle the refugee camps, and to defeat and scatter the former Rwandan army and militia. The additional move on Kinshasa was advocated by Rwanda and supported, Mr Kagame is reported as having said, by the Angolan government, despite Ugandan fears about a long-term commitment of troops.

Mr Kagame says he had Mr Kagame was also quoted as having said that he had warned the US govern- implicit USA backing for ment in 1996 that Rwanda would act against the refugee camps if the inter- the mission— national community failed to do so first, and commended the US administration for subsequently taking the right decisions to let it proceed. Mr Kagame’s warning was confirmed by a US state department official, but the commendation has been neither affirmed nor denied by the US government.

—and implies that Mr Kagame was reportedly less precise on how Mr Kabila came to lead the Mr Kabila was installed as AFDL, but did point out that two senior AFDL commanders, James Kabari and AFDL head— Nindaga Masusu, were members of the RPA. Mr Kagame’s implication, according to the Washington Post interview, was that a Congolese leader such as Mr Kabila was necessary to make the whole thing work, but that real control of the AFDL lay elsewhere.

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—which sparked a round Congo’s interior minister, Mwenze Kongolo, commented sharply afterwards of comments that “this country is ours, not the territory of Kagame. We have nothing to say on these declarations, which have only come from Kagame himself”. While the USA administration kept curiously tight-lipped about Mr Kagame’s claims of its complicity, Mr Kagame’s advisers and the Rwandan foreign minister, Anastase Gasana, claimed that Mr Kagame, who speaks English very precisely, was “misquoted” and had really only meant to affirm that the RPA provided technical assistance for the Congolese struggle. Mr Kabila then gave a terse press conference on July 15 at which he said that Mr Kagame had called him to say that the Washington Post article was incorrect, but that he should come and explain it in person. He went on to say that Rwandan advisers had trained his fighters and provided technical support, but that was all.

Rwanda’s new status in Mr Kagame’s justification for the revelations in his interviews was that he central Africa is wanted to tell the truth and to “free” Mr Kabila. Claims that cast Mr Kabila as augmented a puppet of the Rwandan government, and to a lesser extent the Angolan government, were damaging nonetheless. Rwandan troops are still in Kinshasa, where anti-Tutsi sentiment is running high, and are likely to remain there as guarantors of the new government for some time. Mr Kabila’s enemies are already portraying him as a Tutsi client, and in this context, Mr Kagame’s interviews may be read as warnings to Mr Kabila about the reality of power in the region. Another consideration is that Zambia and Tanzania have also been asked by the AFDL to provide military training and have agreed. Although regional cooperation in shaping Congo’s military capabilities and determining its enemies is part of the process, Mr Kagame’s comments are also intended for consumption in other African capitals.

Mr Kagame tries to Another reason for Mr Kagame’s comments concerns the looming inter- pre-empt damage from national inquiry into massacres in eastern Congo. A competent team of in- the eastern Congo inquiry vestigators should find proof of extensive RPA military involvement in the AFDL’s attacks on refugees inside and outside the camps. Potentially incrimi- nating evidence is currently being disposed of, but if the bodies of women and young children, most of whom were not Interahamwe militia members or ex- Rwandan soldiers, are discovered, Rwanda will be blamed. Mr Kagame has tried to anticipate the claim of Rwandan involvement in the military campaigns of what was then eastern Zaire and the attacks on the camps.

The killings occurred Furthermore, several times in both interviews Mr Kagame established the because of “lack of Rwandan government’s line on the killings; that atrocities were committed, control” at the top— but by individuals and not as part of RPA policy. If RPA senior commanders did plan and carry out massacres of innocent refugees and Zairean citizens, then documentary evidence will be in Kigali out of reach of investigators. They will be unable to draw strong conclusions on the issue and instead will condemn, as with the Kibeho massacre in 1995, the “lack of control” from the top. There actually is some justification for such lack of control due to the need for secrecy during the operation about the Rwandan connection, which donors inclined to leniency may be able to excuse.

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—and inaction by the To encourage them to excuse Rwanda, Mr Kagame used the interviews to say international community that once again, as in 1994, the RPA was forced to act against those seeking to commit genocide because of the lack of will of the international community to do so. The argument is that through the camps in eastern Zaire, the UN and other aid organisations nurtured the regrouping of the ex-Rwandan army and the militias and that therefore the international community had an obligation to neutralise the resulting offensive military capacity against Rwanda. Because it did not do so, Mr Kagame is saying, the RPA had to.

The inquiry must go At the insistence of the governments of Rwanda and Congo, the inquiry’s back to 1993 scope has been extended from events of the last two years to those since 1993. Investigators will also have to take note of Rwandan militia activity, particularly against the Banyamulenge of North Kivu during that time. This will reinforce the argument that the refugee camps aided the militias in maintaining their fighting capacity, which was obviously a threat to the Rwandan government. Donor guilt at ignoring the retention of militia fighting capacity should help ensure that even if Rwanda is blamed for involvement in the massacres, it is not badly punished.

Over 200,000 refugees are The UN High Commissioner for Refugees (UNHCR) has repatriated over 56,000 unaccounted for Rwandan refugees from eastern Congo since its flying missions began in April, but says that it is getting more difficult to locate the rest. The organisation believes that there are 200,000 Rwandan refugees still unaccounted for, and about 35,000 Burundian ones. The international inquiry will have to decide how many have died and how many are scattered. Some of the 20,000 who made it to Congo (Brazzaville) then moved on to Gabon, from where the UNHCR repatriated 1,100 in late July. On August 12, 155 more were forcibly repatriated in a Gabonese aircraft, in a move that provoked anger from the UN agency, which expressed concern for the refugees’ safety. In Angola, UNITA radio claimed on July 30 that government forces were attacking Rwandan refugees who had arrived in the country; the UNHCR puts the number at 2,500 people, other estimates put the figure closer to 20,000.

The new central African On August 14 the presidents of Rwanda, Uganda and Congo held a mini- alliance has enemies— summit in Kinshasa to discuss the way forward for the three countries. The communiqué concentrated on economic measures (see The economy), but the summit was a way of solidifying the de facto military and political alliance between the three, and their current domination of the central African region. However, they have their enemies, who include the Hunde of the eastern Congo, whose failed attempt to drive the Banyamulenge from north Kivu to Rwanda was the trigger for subsequent events (3rd quarter 1996, page 27). The Hunde already have a leader, Charles Simba, the head of the Union of Patriots (UPE), who is reported as asserting that “Kabila has been sent by Tutsis to invade Zaire”. The former armies of Rwanda and Zaire, and the various Bu- rundian and Rwandan militias are obviously enemies too, but their capacity to conquer either Rwanda or Congo has been destroyed for now.

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—including emboldened Even if they cannot topple the government, Rwandan militias operating primar- militias in western ily in Ruhengeri prefecture, and also in Gisenyi and Kigali Rural, are capable of Rwanda a sustained harassment campaign against the RPA. Independent access to Ruhengeri has been difficult for some time but there have been three reports on fighting published since mid-July. The reports, by the US-based human rights organisation, Physicians for Human Rights (PHR), the London-based Amnesty International and the UN’s own Human Rights Field Operation for Rwanda (HRFOR), all conclude that several thousand innocent people have been killed since mid-April, with the bulk executed by the RPA. The general pattern remains one of militia attacks on genocide survivors, Hutu “collaborators” (which in- cludes those working for international agencies), and RPA military installations (2nd quarter 1997, page 26). These are followed by bloody RPA reprisals, with casualties usually reported as due to “crossfire”, but some of which Amnesty International attributes to the RPA “hunting down whole families”. The Rwandan government has dismissed these figures as a gross exaggeration.

Certainly Rwandan militias have learnt the Burundian militia tactic of induc- ing a Tutsi-dominated army to carry out repeated campaigns against them, consequently terrorising, alienating and killing a predominantly Hutu rural population. This breeds sympathy and recruits from the population, which sustains the militia campaign. An important genocide suspect who was contro- versially appointed governor of Ruhengeri in late March Boniface Rucago (2nd quarter 1997, page 26), has been put in place to halt this process. The cooperation of several hundred locals from the prefecture with the RPA in its bid to uncover militia members, which started in July, is an indication that he may be succeeding. This has persuaded most of the angry National Assembly members who demanded his suspension during a heated debate on June 6 to let the matter drop until there is good reason to revive it.

The government’s Also assisting the RPA, according to the PHR, are US military training officers, counter-insurgency who are teaching counter-insurgency (2nd quarter 1996, page 22). The capacity is strengthening Pentagon, however, maintains that US special forces are working with the RPA “under a programme of non-lethal training aimed at creating a more disciplined force”. A South African ban on arms exports to Rwanda was lifted at the end of July. These are expected to consist initially of the remainder of a contract for armoured personnel carriers and spare parts whose delivery was aborted in November 1996 when the deal attracted adverse publicity from the local and international press (4th quarter 1996, page 27). Rwanda somehow acquired two Russian-made combat helicopters in late July, but has no pilots to fly them yet. Pilots are currently undergoing training in South Africa and are expected to return to play an active role in counter-insurgency.

Genocide trials anger By the end of June Rwandan courts had tried 142 genocide cases, acquitted human rights groups and eight people and sentenced 61 to death. HRFOR was particularly concerned survivors about the general absence of defence witnesses, most of whom are too fright- ened to attend, and defendants being denied opportunities to cross-examine prosecution witnesses. Amnesty International has protested on several occa- sions that those sentenced to death have not found justice in the Appeals Court, but noted on June 2 the first appeal by a defendant to be upheld by the court. Meanwhile genocide survivors protested at the leniency of sentences in

EIU Country Report 3rd quarter 1997 © The Economist Intelligence Unit Limited 1997 26 Rwanda

late July, when ten people were each given ten-year sentences for their involvement in the genocide. Latest figures suggest that at least 110,000 people are now in Rwandan prisons on suspicion of genocide.

Kenyan police arrest key The reputation of the International Tribunal for Rwanda (ITR), sitting in Arusha genocide suspects (Tanzania), was improved by the arrest on July 18 and August 12 of several key suspects in Kenya. These include a Belgian who helped set up the ethnic su- premacist radio station, Radio Télévision pour la Libération des Milles Collines (RTLM), Georges Ruggiu, the prime minister of Rwanda’s interim government from April to July 1994, Jean Kambanda, and the former head of the Presidential Guard, Colonel Gratien Kabiligi. The Rassemblement pour le retour des réfugiés et la démocratie au Rwanda (RDR), a refugee-based organisation now in trans- ition into a political party, alleged that the Kenyan police allowed three other suspects to escape, including the notorious chairman of RTLM, Felicien Kabuga.

—heralding improvements The arrests indicate a change of policy by the Kenyan government, which has in Rwandan-Kenyan been left somewhat friendless in the region with the fall of Mr Mobutu. Al- relations— though the suspects were transferred to Arusha and not Kigali, Mr Kagame’s surprise visit with the president of Kenya, Daniel arap Moi, two days earlier was almost certainly connected with the arrests. Further confirming the shift in Rwandan-Kenyan relations, which have been strained for some time, both Mr Kagame and Mr Moi said they had no objection to the restoration of diplomatic relations, which were severed in June 1996 (3rd quarter 1996, page 27), although no date for this has yet been set.

—and the fortunes of the The ITR proclaimed the arrests as a turning point for the organisation, as they tribunal enable it to try a significant number of those who planned and orchestrated the genocide. The tribunal’s current cases are dragging on, plagued by adjournments. The trial of Jean-Paul Akayesu, the first to be launched by the tribunal in late 1996 (4th quarter 1996, page 27), was adjourned again in late May until September 29 as his lawyer has not managed to locate any defence witnesses.

The legacy of the genocide It was announced in late July that the remains of up to 20,000 victims of the lingers on killings from Gikongoro are to be mummified by Rwandan forensic experts, and will later be exhibited in a museum dedicated to the genocide. On August 4 the newly installed Catholic bishop of Kigali finally apologised to the Rwandan people, on behalf of the Church for its failure to openly denounce the genocide. In March 1996 Pope John Paul II incensed many Rwandans when he denied that the Church as a whole bore any responsibility for the genocide (2nd quarter, 1996, page 27).

The economy

The UN rates Rwanda as The UN’s annual human development index, a conglomeration of income, the world’s second education and life expectancy figures has placed Rwanda as the second least- least-developed country developed country in the world for 1997. Burundi is the seventh least- developed and every country in the region except Kenya is in the bottom one-third of the table.

EIU Country Report 3rd quarter 1997 © The Economist Intelligence Unit Limited 1997 Rwanda 27

Agriculture

The June harvest is up by With the poor 1997 harvest in January, Rwandans and humanitarian agencies 6% on 1996— were hoping for better things in the 1997 second season, which runs from February to June and usually accounts for over half of annual subsistence production. Overall production was up by 6% on the 1996 second season, according to UN World Food Programme (WFP)/Food and UN Agriculture Organisation (FAO) estimates, and the land cultivation area was up by one- third on last year’s, although less than in 1990. However, the production of beans, which are Rwanda’s main subsistence crop, was down by 25% because of the lateness of the rains, and many vegetables were destroyed by the force of the rains when they did arrive. Flooding was widespread, and in those areas only bananas thrived, though sorghum and sweet potatoes survived. The local press also blamed low yields on current land policies which discouraged farming, be it by those occupying other people’s land, or by returnees either waiting for their land or sharing it with recent occupiers in inevitably tense partner- ships. A US Agency for International Development (USAID) report released in July also mentioned negative factors such as reduced labour migration among returnees because they were still waiting for identity cards, the jailing of many who normally would be farming, and fighting in western Rwanda.

—but it is not enough to Whatever the cause, a 6% overall increase is totally inadequate in the face of the feed Rwanda’s swollen return of over 1.5 million refugees since November 1996. The total 1997 harvest population is predicted to provide around only 70% of food needs for the year. The total cereal and pulse deficit is expected to be 192,000 tons, of which 134,000 tons will be required as food aid. Meanwhile, WFP is launching an inputs distribution programme in time for September’s preparations for the 1998 first season. A household food economy survey conducted by the Save the Children Fund in Butare and Gikongoro prefectures found refugees who returned after March this year to be among the most vulnerable in Rwanda, and estimated that they will only be able to meet 60-70% of their income needs this year. Many of the poorest households nationwide are headed by widows.

Food security varies The WFP has found that people all over Rwanda cannot afford to buy food according to region because of rising prices, and that the prefectures most short of food are Kibuye, Gikongoro, Butare, South Kigali and some communes in Gitarama. Humanitar- ian agency workers who visited Ruhengeri in early August reckoned food security to be bad there too, with malnutrition rates high especially in the strife-torn north-west and south. The picture in eastern Rwanda is better, though, with most households in Kibungo, where 500,000 people returned in December last year, reportedly self-sufficient. Many Kibungo households also have plenty of cows, of which there are there still only 80% of the 1994 figure nationwide.

Coffee production rises The Rwandan coffee parastatal, Ocir, predicted in early July that coffee prod- slightly uction would be 17,000 tons this year, 2,000 tons more than last year’s harvest. Late rains and continued low prices paid to producers, of Rwfr700/kg ($2.25/kg), have slowed the sector’s recovery. In 1993 Rwanda produced 29,000 tons of coffee. Still, Rwanda had a windfall benefit from the smuggled importation of Burundian coffee which it was able to export as its own. Rwanda’s coffee

EIU Country Report 3rd quarter 1997 © The Economist Intelligence Unit Limited 1997 28 Rwanda

earnings have also been boosted by the good prices available for coffee in 1997, which will continue only until the end of the year. After that, growth in consumer stocks and the strong possibility of a frost-free season in Brazil could see prices dip again (see Uganda: Agriculture).

Foreign trade and payments

A road link is planned The presidents of Rwanda, Uganda and Congo agreed at the summit that ended between eastern Congo, on August 13 to a road that would link Kisangani/Stanleyville in eastern Congo Rwanda and Uganda with Rwanda and Uganda, via Goma. The project was mooted long ago and funding was approved by the EU, but was put on hold after the EU suspended its aid to what was then Zaire. Ugandan radio has reported that work is due to begin on the project in September.

CEPGL is floundering— A meeting of the Communauté Économique des Pays des Grands Lacs EAC is promising (CEPGL), comprising Rwanda, Burundi and Congo, was held in Kinshasa on June 26. CEPGL has been stalled more or less since its inception, and although meetings are no doubt more cordial now then they have been in recent years, few anticipate any startling breakthroughs from the organisation. Much more promising is the East African Community (EAC), which consists of Uganda, Kenya and Tanzania, whose prospects are currently fairly good and which Rwanda has applied to join. Mr Moi announced his strong support for Rwanda’s application on July 17 and it now seems likely to be accepted.

Aid and trade

• A delegation of South African civil servants from several government minis- tries will visit Rwanda in September to prepare the way for a full trade mission in November. Business people interested in investing in Rwanda, probably by buying chunks of privatised parastatals, are expected to be part of the November mission.

• The French government announced in mid-June that it is donating FFr5m ($816,000) to the education ministry to help the teaching of French in Rwanda.

• In mid-July, the Austrian government cancelled Rwanda’s $17m debt and said that it would resume aid.

EIU Country Report 3rd quarter 1997 © The Economist Intelligence Unit Limited 1997 Burundi 29

Burundi

Political structure

Official name République du Burundi

Form of state Unitary republic

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

National legislature Assemblée nationale, with 81 members elected by universal suffrage on June 29, 1993. With most of its members dead or in exile, the assembly is inquorate but is technically open

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

Head of state President, Major Pierre Buyoya

National government Appointed by Mr Buyoya in August 1996; last reshuffled in May 1997

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)

Prime minister Pascal Firmin Ndimira

Key ministers Agriculture Damas Ntiranyibagira Civil service Monique Ndakoze Commerce, industry & tourism Gregoire Banyiyezako Communal development Pierre Bambasi Communications Pierre-Claver Ndayicariye Defence Major Firmin Sinzoyiheba Development planning & reconstruction Evariste Minani Energy & mines Bernard Baraderea Finance Gérard Nibigira Foreign affairs & cooperation Luc Rukingama Human rights & women’s affairs Christine Ruhaza Institutional reform Eugène Nindorera Interior & public security Epitace Bayaganakandi Justice Terence Sinunguruza Labour Barnabé Muteragiranwa Peace process Ambroise Niyumbasa Primary education Joseph Ndayisaba Public works Vital Nzobonimpa Resettlement of refugees Pascal Nkurunziza Secondary & higher education Rogatien Ndoricimpa Territorial management & environment Samuel Bigawa Transport Venerand Nzohabonayo Youth, sport & culture Bonaventure Gasutwa

Central bank governor Mathias Sinamenye

Economic structure

Latest available figures

Economic indicators 1992 1993 1994 1995 1996 GDP at market prices Bufr bn 258.4 262.0 286.5 310.0 310.5 Real GDP growth % 2.3 –5.5 –18.0 –3.0 –17.4 Consumer price inflationa % 4.5 9.7 14.8 19.3 26.0 Populationb m 5.78 5.77 5.87 5.98 6.09 Exports fobc $ m 76 64 106 122 44 Imports fobc $ m 129 129 114 147 112 Current account $ m –10 –11 41 9 –54 Reserves excl gold $ m 174.2 163.0 204.7 209.5 139.6 Total external debt $ m 1,022 1,061 1,123 1,157 1,165 External debt-service ratio, paid % 36.6 36.4 39.6 27.7 n/a Green coffee productiond ’000 tons 36.5 22.5 39.9 24.1 25.0 Exchange rate (av) Bufr:$ 208.3 242.8 252.7 249.8 302.8

August 18, 1997 Bufr355.2:$1

Origins of gross domestic product 1995 % of total Components of gross domestic product 1995 % of total Agriculture 37.0 Private consumption 84.1 Industry 20.9 Public consumption 18.2 Services 42.1 Gross domestic investment 8.7 GDP at factor cost 100.0 Exports of goods & services 9.3 Imports of goods & services –20.3 GDP at market prices 100.0

Principal exports 1996 $ m Principal imports 1996 $ m Coffee 25.2 Gas oils 8.9 Tea 5.4 Mechanical goods 7.7 Manufactures 4.3 Electrical appliances 7.3

Main destinations of exports 1995e % of total Main origins of imports 1995e % of total Belgium-Luxembourg 25.2 Belgium-Luxembourg 15.4 Germany 21.5 Saudi Arabia 13.1 USA 7.9 Germany 8.8 Rwanda 4.1 France 8.6 a Consumer price index for Bujumbura. b Mid-year estimates. c Balance-of-payments basis. d Crop years (April-March) starting in year stated. e Based on partners’ trade returns; subject to a wide margin of error.

Outlook for 1997-98

Mediators will be looking The last minute failure of the talks in Arusha (Tanzania) on August 25 to mate- for a ceasefire if the talks rialise between the Burundian government, the Front pour la démocratie au get started— Burundi (Frodebu) and the Conseil national pour la défense de la démocratie (CNDD), has for the moment dashed hopes that a way out of the bloody stale- mate that engulfs so much of the country will be found. International mediators were hoping to secure a commitment from the warring factions to a ceasefire, but will now be seeking merely to restart the talks and if possible to cool relations between Tanzania and Burundi.

—but absences and bad The most likely reason that the Burundi government pulled out of the talks, blood will cause along with its anger at Tanzania’s support for continued sanctions against difficulties for Mr Nyerere Burundi, is the refusal of the Union pour le progrès national (Uprona) to participate. Thus mediators will be working hard behind the scenes to encourage a more positive attitude from that party, but are unlikely to meet with much success. The former president of Tanzania, Julius Nyerere, is mediating the talks, but has long been demonised by Uprona. The party’s minimum demand for its entry into the peace process would probably be that he steps down as mediator, and would be supported in this by the Burundi government, which has recently also hardened its position against him.

If the massacre trials are Repeated calls from international bodies for an immediate cessation of trials for halted, the loyalty of the those accused of perpetrating the 1993 massacres, of whom there are now over armed forces will be vital 6,000, are to be expected. If the government agrees to postpone the trials it will certainly be branded a sell-out by Uprona and the smaller predominantly Tutsi Burundi: gross domestic product parties. The international community would like an end to the trials and may % change, year on year even financially reward Burundi for doing so. If the president, Major Pierre 5 Buyoya, can reassure the armed forces about their fate, they should feel suffi- ciently reassured to defend the regime against acts of resistance from these 0 Tutsi parties. The risk of a coup from within army ranks could well increase in such a situation, but Mr Buyoya judges himself a good enough coup-spotter to -5 take the chance.

-10 Calls from international quarters for the policy of regroupment (resettlement in camps of those who live in areas deemed unsafe by the military) to end will -15 also intensify and the government is showing signs of modest action in this Burundi Africa direction. However, most of the over 300,000 regrouped people, many of -20 1991 92 93 94 95 96 whom the UN World Food Programme (WFP) describes as dangerously mal-

Sources: EIU; IMF, World Economic Outlook. nourished, could well still be in their camps for months to come.

Bilateral donors are not Although the African Development Bank appears likely to resume lending to yet ready to resume Burundi, bilateral donors are not willing to follow suit. They will require a funding timetable for Mr Buyoya’s handover of power to a constitutional authority, preferably to a Frodebu member who is broadly acceptable to all factions of the party. If donors do resume funding now, they will be vulnerable to the charge that they are sanctioning Mr Buyoya’s coup and the usurpation of constitutional order in Africa. There is no prospect of any economic reform programme until the civil war subsides, so Burundi cannot expect much from the

World Bank or the IMF. Burundians have shown great skill in exporting most of this year’s tea and coffee production, at a time when international prices for both are extremely good. Nonetheless, Burundi’s external debt of at least $1.2bn is such that the country still needs sustained balance-of-payments support from donors. Until it gets that support Burundi will continue to default on its debts, thus eroding what was once one of the best credit ratings in Africa.

Review

The political scene

Inclusive talks to resolve Talks between Burundi’s warring factions and some of its political parties were the Burundi crisis are supposed to have begun in Arusha (Tanzania) on August 25 but have been postponed indefinitely— indefinitely postponed. The Burundian government has justified its withdrawal by citing the decision of regional heads of state to maintain sanctions against Burundi and the allegedly aggressive posture Tanzania is taking towards Burundi at the moment. The talks were organised by the former president of Tanzania, Julius Nyerere, who was appointed as a mediator in the conflict by a meeting of the regional heads of state in Cairo, Egypt in November 1995 (1st quarter 1996, page 34), and the UN/Organisation of African Unity (OAU) special repre- sentative in the region since January this year, Mohamed Sahnoun. The main Burundian groups which were scheduled to appear at the talks were the government, the Conseil national pour la défense de la démocratie (CNDD), and the Front pour la démocratie au Burundi (Frodebu). The CNDD’s armed wing has been engaged for some time in a bloody battle for supremacy with the Burundian army. Frodebu was Burundi’s ruling party until ousted from power in the July 1996 coup which installed the current president, Major Pierre Buyoya.

—because of government The Union pour le progrès national (Uprona), Burundi’s only legal party until fears of a Tutsi backlash the 1991 reforms which Mr Buyoya instituted the last time he was in power, ruled out its appearance at the talks from the beginning. This is probably what caused the Burundi government to lose its nerve and pull out of the talks, as it feared isolating itself from the Tutsi community from which it draws its support. Uprona denounces the talks because it regards the CNDD as a genocidal force against the Tutsi. The suggestion is that Mr Buyoya, who was supposed to defend Tutsi interests, is selling them short and in truth speaks for no-one but the army and himself. This is a view that has some support among Tutsi from the areas like Gitega and Ngozi most affected by the 1993 killings. Mr Buyoya and most of the army elite are from Bururi, where there are lots of Tutsi and there were relatively few massacres in 1993.

Uprona is split down the In May the chairman of Uprona, Charles Mukasi, denounced revelations that middle— the government was talking to the CNDD in Rome as treason (2nd quarter 1997, pages 36-37). Several senior Uprona members then publicly supported the talks. Life has been difficult for Mr Mukasi’s supporters ever since—the houses of Mr Mukasi and other Uprona leaders were searched by security forces on June 5 and Mr Mukasi claimed that police surrounded the Uprona

headquarters on June 25 to break up a party meeting. According to the July 15 report to the Security Council by the secretary-general of the UN, Kofi Annan, the leader of the pro-talks faction is Frederic Ngenzebuhoro, the leader of Uprona’s parliamentary group. This view must be seen in the context of the UN’s attempts to emphasise the role and importance of Burundi’s National Assembly. At any rate, neither Mr Ngenzebuhoro nor any other Uprona member is going to Arusha in an official capacity, which suggests that the mediators recognise that Mr Mukasi’s views are in the ascendance within Uprona.

—and Frodebu is deeply Frodebu is even more divided than Uprona, with its members scattered be- divided— tween Burundi, Kenya and Tanzania. One faction claims that the leader of the CNDD, Leonard Nyangoma, whose whereabouts is unknown, is the real head of the party. Another supports the leadership assertions of the party chairman, Jean Minani, who is in Dar es Salaam. Matters got so bad in July that the Minani faction appealed to the Tanzanian government for protection, alleging that other party members were trying to kill them. The emergence of former Frodebu and Burundian president, Sylvestre Ntibantunganya, from the US em- bassy in Bujumbura in early June might have been expected to further compli- cate the issue of Frodebu’s leadership, but most in the party considered him a spent political force even before he fled the Burundian presidency.

Mr Annan’s July report is careful to underline the significance to the peace process of the speaker of the National Assembly, Leonce Ngendekumana of Frodebu, and Mr Nyerere also sees him as a potentially useful ally. Mr Ngendekumana is still in Burundi and has endorsed the government’s approach to the peace process, despite himself being the subject of legal investig- ations on the suspicion that he participated in genocide. Most unusually for a Frodebuist, Mr Ngendekumana has called for talks to shift the focus from the return to constitutional legality and army reform, which are CNDD’s basic demands and generally Frodebu’s too. Mr Ngendekumana said instead on Au- gust 6 that what should be negotiated is “a project for society” rather than power itself. This kind of language is reminiscent of the government-orchestrated national debate and Mr Ngendekumana risks being branded a sell-out by Frodebu grass-roots if he is not careful.

—but has nonetheless won Mr Minani won two key concessions from international mediators about talks, concessions from the but these have been rendered worthless by the talks’ collapse. The first was that international mediators talks should take place in Arusha and not Rome, and the second was that talks should be inclusive of all political groups and should not just involve political representatives of armed groups. Shortly after the announcement of the Arusha talks it was confirmed by the Burundian minister of institutional reform, Eugène Nindorera, on July 31 that the Rome talks between the government and the CNDD had been suspended. These talks were intensely threatening to Frodebu, as they increased its already severe political marginalisation (2nd quarter 1997, page 37). It is not yet clear whether the Rome talks will be resumed now that the Arusha process is stalled.

Fighting intensifies— Mr Nindorera said that the reason the Rome talks had been suspended was that they had failed to stop the war in Burundi between the CNDD and the army, and he went on to wonder aloud how there could be serious talks in Arusha

while the war continued. Certainly the fighting between the two opposing forces has intensified still further over the last three months. While CNDD attacks were concentrated on the southern provinces of Makamba and Bururi and the north-west province of Cibitoke between March and May (2nd quarter 1997, pages 36-37), from June to August they have also struck in Bubanza, Kayanza and Bujumbura Rurale provinces, as well as in the capital Bujumbura itself. This is the first time there have been attacks on the capital for about a year.

—suggesting regroupment Apart from generating terror, displacement and death in affected areas, is losing its military CNDD’s attacks are also intended to demonstrate that regroupment cannot impact stop them operating. Over 350,000 people have been regrouped into camps since the beginning of the year (1st quarter 1997, page 38), primarily in Karuzi, Kayanza, Muramvya, Bubanza and Cibitoke provinces. As well as mining roads and launching raids in provinces where everyone has supposedly been regrouped, the CNDD has also attacked several regroupment camps themselves. Militia allegedly killed 60 people in Cibitoke at the end of May, and cleared the Mitakataka regroupment camp in Bubanza on June 6, kidnapping or killing up to 200 residents in the process according to the state-run radio station. As usual, the Burundian army has responded in like manner, bayoneting civilians to death, including young children, in early July to revenge the injury of two soldiers in a landmine blast, according to Amnesty International.

Pressure to disband the International condemnation of the regroupment policy has intensified over the regroupment camps quarter, prompting Mr Buyoya to advance tentative timetables to his critics for builds— the disbandment of the camps. He told a press conference in late June that the disbandment could be completed from “secure zones” by the end of September and in time for the next planting season. Substantive decision-making about the matter, however, appears to be in the hands of provincial governors. Some 8,000 people were transferred from the Bugenyuzi regroupment camp to Mas- abo commune in Karuzi in late June, and 16,000 from the Gisyo camp in Kayanza to their old homes in July. Returnees reported that almost all their possessions had been stolen in their absence including their roofs. The Kayanza governor told humanitarian workers that he would prefer to see those returning from regroupment camps settled near roads rather than going back to their old homes, prompting fears that a new villagisation policy is being planned to replace regroupment. However, in a statement on August 12, where he indicated that he expected all the camps to be clear by the end of September, the governor implied that the returnees would be going home and not to new villages.

—but most of the Even if all those regrouped in Kayanza do go home, that will still leave hun- regrouped are being kept dreds of thousands of people regrouped in other provinces, whose governors where they are have yet to indicate when they too will go home. The chances are slipping away that the regrouped will be able to return before the next planting season, leaving them even more vulnerable to malnutrition and disease then they already are (see The economy). Infectious diseases are proving a big problem too, with typhus plaguing many regroupment camps since the beginning of the year. On June 10, roughly the height of the epidemic, the World Health Organisation (WHO) reported nearly 29,000 cases. Around 500 cases of cholera were reported in displaced people’s camps in Nyanza-Lac during June. The problem was exacerbated by rebel attacks in the area and their cutting off the town’s water supply for a time.

Hutu militias are fighting As well as fighting the Burundian army, blowing up civilians unlucky enough each other to be in the minibuses that hit their landmines, and attacking regrouped and displaced camps, the CNDD has also been fighting the Parti pour la libération des peuples Hutu (Palipehutu) militia. There were reports of clashes between the two militia in Cibitoke and Bubanza provinces throughout July, and also in the Lukole refugee camp in Tanzania’s Ngara region. At least 600 people appear to have been killed in the fighting and up to 10,000 displaced. The militias’ conflict has less to do with their ideological differences—Palipehutu is explic- itly ethnicist, whereas the CNDD says it is fighting the ethnicism of the Burundian armed forces—than the fact that the CNDD has been recognised by the international community and the Burundian government as the only Hutu militia worth talking to, leaving Palipehutu in the cold once more.

Burundi’s relations with Relations between the Burundian and Tanzanian governments, which have been Tanzania deteriorate strained for some time (2nd quarter 1997, page 38), have worsened recently, to the further point where the UN Security Council called on August 21 for an improvement. The bad blood has been stoked by a succession of incidents on the border and what seem to be regular incursions from Tanzania of Burundian militia. On July 20 the Tanzanian government called on Burundi to pull its troops back from the

border after Burundian soldiers allegedly killed a Tanzanian family inside Tanzanian territory, an appeal that was rejected on August 5. The foreign minister, Luc Rukingama, denied on August 24 that Burundi had any plans to attack Tanzania. He accused Tanzania of failing to control incursions from rebel camps along the border. The Tanzanian government has not subsequently pursued the matter, to the dismay of many Tanzanian members of parliament.

The Tanzanian government has also condemned the trials of genocide suspects in Burundi (see below), saying that they jeopardised the peace process, and has been vocal in its support of the continuation of the region’s much-watered down economic sanctions against Burundi (see The economy). The Burundian government has reacted angrily so far, but has stopped short of threatening aggression towards Tanzania, although the successes of the Rwandan Patriotic Army (RPA) in the Congo (see Rwanda; The political scene) has no doubt tempted it to do so.

Trials of coup plotters are On July 4 the trial of those suspected of the 1993 coup attempt during which postponed while genocide then-president, Melchior Ndadaye, was killed (2nd quarter 1997, page 40) was trials go ahead— adjourned for no very clear reason until September. The leisurely pace of the proceedings contrasted forcefully with that of the trials against those suspected of the killings that followed the coup. On July 31 six people found guilty were executed in Bujumbura’s Mpimba prison after their appeals against their sentences were rejected, and on August 14 another 14 people were found guilty and sentenced to death. At least 6,000 people are now in prison under suspicion of genocide. The trials and particularly the executions have been condemned by international human rights groups, regional heads of state and the UN secretary-general, Mr Annan. Mr Annan, however, noted in his report to the Security Council of July 15 that trials improved once international lawyers started defending the accused in April this year, with the result that sentences have in general been reduced, and the number of acquittals has risen.

—and international anger Allowing these trials to continue in defiance of the international community reassures conspiracy- bolsters Mr Buyoya’s credibility among many Tutsi, as Mr Mukasi’s strong sup- minded Tutsi port for the proceedings in late July purported to demonstrate. To this must be linked the government’s constant appeals for an international tribunal on genocide in Burundi to be established. Recently Mr Annan and the US administration, while being careful not to rule out the idea, have put consideration of the matter on hold. This is because both regard appearing to offer the prospect of a tribunal as a handy incentive for the Burundian government to move towards an inclusive settlement. The under secretary-general of the UN for humanitarian affairs visited Bujumbura on August 23-25 to discuss the tribunal proposal and to visit regroupment camps in northern Burundi.

Many Tutsi in Burundi have a different explanation for the UN’s equivocation. They suspect a conspiracy against them whereby the international community acknowledges the genocide in Rwanda but refuses to acknowledge what they regard as self-evident, namely that there was a pre-planned attempt at genocide of their community in October 1993. The negative comments from international sources about the trials and Mr Buyoya’s persistent call for the

tribunal feed this Tutsi conspiracy theory, and so paradoxically go some way towards reassuring them that Mr Buyoya is indeed “their man”.

The economy

Fuel and export sanctions The foreign ministers of the region decided on August 16-17 in Kampala to are being maintained— extend the remaining sanctions against Burundi, which means that imports of fuel are still banned as well as the export of tea and coffee. The regional position on international flights is somewhat inconsistent. Following Kenyan government permission, commercial flights by African Airlines between Nairobi and Bujumbura began on July 19 and the rights of the World Food Programme (WFP) to operate the route were withdrawn the day before. This has created a bottleneck as African Airlines only flies once per week. Other countries in the region have maintained their sanctions on flights, but Air Tanganyika started operating between Brussels and Bujumbura on July 31.

—but no longer make The fuel embargo has never been effective and its continuation does not make much difference for fuel much difference, as figures released recently by the fuel parastatal, Societé imports— d’Entreposage de Produits Petroliers (SEPP), suggest. SEPP reports that from August to December 1996, 1,313 tons of petrol and 4,322 tons of diesel were imported, and 3,650 tons of petrol and 4,322 tons of diesel oil consumed. The import figures are far higher than the needs of just the humanitarian agencies. The balance having certainly been smuggled and massive underreporting should be assumed. The consumption figures are probably more accurate and a reasonable indication of actual consumption outside internal humanitarian agency distribution networks. Only the Burundian armed forces have ever stockpiled much fuel and it is unlikely that much of the 2,337-ton deficit between petrol consumption and importation was supplied by stocks. A reasonable estimate therefore would be that around 1,500 tons of fuel was smuggled into Burundi in those five months, which tallies with the circumstantial evidence of tankers entering daily from the northern borders.

—or coffee exports The Burundian coffee parastatal, Ocibu, offered further evidence of the ineffec- tiveness of the coffee export embargo when it revealed in mid-May that 14,000 tons of the 1996/97 crop of 25,000 tons had been sold abroad and a contract signed for another 2,000 tons. Unofficial figures report the total exports at 17,190 tons. The 1997/98 harvest is not expected to be a good one, because of insecurity in the country, a chronic shortage of fertilisers and ageing plantations. Ocibu predicts final production to be just over 20,000 tons but, with international prices expected to be relatively stable for the rest of the year, it anticipates earnings of $120m from the crop. In mid-June Burundian arabica wholesaled at 200 cents/lb, double the price last season.

The government wants The border between Congo and Burundi reopened on July 15. The Gatumba customs receipts from border post between the two countries is a well established smuggling route Gatumba which has been tolerated by Burundian officials of late to ease the effect of sanctions. Now the government is calling for a substantial increase in customs receipts from the post, leaving Burundian customs the arduous task of re- establishing some form of control in order to generate them. Meanwhile at

Bujumbura’s port, 75% of the employees are back at work and turnover is rising steadily.

The second 1997 harvest is A joint UN Food and Agriculture Organisation (FAO) and WFP report based on better than last year’s— research conducted in late June predicted that food production in the 1997 second season would be 1.7m tons, which is 4% more than in 1996. However, it expected total food production in the year to be about the same as last year’s and 4% lower than the 1988-93 average. After continually rising throughout June, food prices started coming down in July as produce from the impeshi became more available. The FAO found on July 18 that foodstuffs that cost Bufr10,803 ($30) on July 4, cost only Bufr9,698 by July 18, representing a fall of 11%.

—but there are chronic The WFP has found that food shortages in Burundi are particularly chronic in food shortages in the regroupment camps, with those in Karuzi, Kayanza and Bubanza the worst camps affected, and warned on August 15 that tens of thousands of people are not getting enough food to stave off malnutrition and life-threatening diseases. The WFP intends to distribute 21,000 tons of food to 280,000 displaced people over the next five months.

Regideso did well in 1996 The electricity parastatal, Regideso, reported in June an impressive performance in 1996, recording an increase in power production from 96.7m kwh in 1995 to 97.3m kwh, in the face of perpetual sabotage from the CNDD. The company attributes the rise to an 18.6% increase in production at the Rwegura power station and the start-up in January 1996 of a 5.2-mw thermal station. Sabotage made more impact on consumption figures, which were sharply down from 128m kwh in 1995 to 100m kwh.

The ADB pledges funds In the first news of prospective non-emergency aid for some time, the African Development Bank (ADB) announced on June 3 that it had allocated $55m to help rebuild the Burundian economy.

Burundi: total humanitarian assistance for the Great Lakes emergency (Jul 18, 1997) Donor Value US$ % of funding USA 100,121,119 27.96 EC-ECHO 89,380,857 24.96 Canada 15,261,457 4.26 Norway 13,085,369 3.65 Japan 9,870,000 2.76 Germany 7,720,403 2.16 Belgium 7,611,334 2.13 Netherlands 7,029,740 1.96 Sweden 4,913,683 1.37 UK 4,663,358 1.30 Others 97,390,535 27.48 Total 358,047,855 100.00 Source: UN, Department of Humanitarian Assistance.

EIU Country Report 3rd quarter 1997 © The Economist Intelligence Unit Limited 1997 Quarterly indicators and trade data 39

Quarterly indicators and trade data

Uganda: quarterly indicators of economic activity

1995 1996 1997 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr Production Annual totals Coffee ’000 tons ( 220a ) ( 238a ) ( n/a ) Cotton, lint “ ( 12 ) ( 12a ) ( n/a ) Prices Monthly av Consumer prices, Kampala: 1990=100 241 245 244 256 258 262 265 272 272 288b change year on year % 7.6 5.6 9.4 11.8 7.1 6.9 8.6 6.3 5.4 n/a Money End-Qtr M1 NUSh bn 370.85 380.85 386.02 410.53 423.89 439.78 452.98 451.76 466.46 468.69c change year on year % 33.3 27.4 15.3 15.4 14.3 15.5 17.3 10.0 10.0 n/a Foreign trade Qtrly totals Exports fob NUSh m 124,025 100,051 88,676 133,334 176,960 137,407 132,420 166,811 179,954 53,861d Imports cife “ 267,408 210,673 253,407 292,829 305,120 280,318 323,686 338,255 317,460 116,576d Exchange holdings Foreign exchange $ m 342.0 388.2 382.5 458.4 466.7 479.7 470.3 527.3 536.9 563.9c Exchange rate End-Qtr Principal rate NUSh:$ 927.1 965.9 969.4 1,009.5 1,018.6 1,058.8 1,088.9 1,029.6 1,024.7 1,069.1f

Note. Annual figures of most of the series shown above will be found in the Country Profile. a Estimate. b Average for April-May. c End-April. d April only. e Cash basis. f End-May.

Sources: FAO, Quarterly Bulletin of Statistics; IMF, International Financial Statistics.

Rwanda: quarterly indicators of economic activity

1995 1996 1997 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr Prices Monthly av Consumer prices: 1990=100 n/a 266.0 304.4 308.5 304.9 305.6 319.9 328.3 333.7 337.3a change year on year % n/a n/a n/a n/a n/a 14.9 5.1 6.4 9.4 n/a Money End-Qtr M1, seasonally adj: Rwfr bn 31.94 34.49 38.01 39.74 43.96 44.76 41.34 44.36 50.30 49.66b change year on year % n/a n/a n/a 41.0 37.6 29.8 8.8 16.1 14.4 n/a Foreign trade Qtrly totals Exports fob Rwfr m 620 1,549 4,573 5,373 4,372 2,868 8,830 2,499 3,008c n/a Imports cif ” 10,175 14,586 18,136 19,014 16,651 18,376 20,402 23,409 15,627c n/a Exchange holdings End-Qtr National Bank: foreign exchange $ m 3.1 2.0 54.3 105.5 109.5 113.3 122.4 136.5 143.2 169.7 Exchange rate Official rate Rwfr:$ 247.7 291.1 313.9 299.8 304.3 309.6 307.4 304.2 307.9 299.6

Note. Annual figures of most of the series shown above will be found in the Country Profile. a April only. b End-April. c Total for January-February.

Source: IMF, International Financial Statistics.

EIU Country Report 3rd quarter 1997 © The Economist Intelligence Unit Limited 1997 40 Quarterly indicators and trade data

Burundi: quarterly indicators of economic activity

1995 1996 1997 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr Prices Monthly av Consumer prices: 1990=100 155.6 165.6 171.6 174.2 190.5 198.0 217.6 237.2 253.2 272.9a change year on year % 18.9 21.3 18.3 18.7 22.4 19.6 26.8 36.2 32.9 n/a Money End-Qtr M1, seasonally adj: Bufr bn 44.56 39.58 n/a n/a 39.01 39.31 39.83 41.52 n/a n/a change year on year % 41.1 18.3 n/a n/a –12.4 –0.7 n/a n/a n/a n/a Foreign trade Qtrly totals Exports fob Bufr m 10,767 6,638 3,840 4,737 6,712 4,156 355 70 97 n/a Imports cif ” 14,486 14,751 15,510 13,454 12,877 15,148 7,058 2,249 5,891 n/a Exchange holdings End-Qtr Central bank: goldb $ m 4.83 4.95 4.90 4.91 5.10 4.97 4.90 4.80 4.48 4.37 foreign exchange “ 219.43 209.19 201.82 200.67 179.69 161.27 145.11 131.06 133.76 133.62 Exchange rate Official rate Bufr:$ 234.6 241.2 259.9 277.9 281.6 317.4 319.9 322.4 339.2 339.1c

Note. Annual figures of most of the series shown above will be found in the Country Profile. a Average for April-May. b End-quarter holdings at quarter’s average of London daily price less 25%. c End-May.

Sources: IMF, International Financial Statistics.

Uganda: foreign trade $ ’000 $ ’000 Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Imports cif 1993 1994 1995 1996 Domestic exports fob 1993 1994 1995 1996 Food 30,594 70,837 90,226 53,951 Fish & products 8,872 15,104 32,753 25,035 of which: Coffee 106,775 343,289 384,122 396,206 cereals & preparations 12,971 38,336 39,741 31,696 Tea 11,141 11,804 8,744 17,059 sugar & preparations 12,270 16,355 26,694 7,540 Oil seeds 5,194 2,832 8,808 10,467 Textile fibres 15,776 19,648 23,421 22,445 Raw cotton 5,505 3,485 9,697 15,329 Crude fertilisers & minerals 5,876 6,761 9,496 11,185 Inorganic chemicals 7 23 1,049 32,047 Petroleum & products 6,563a 59,115 77,770 91,421 Total incl others 222,575 463,514 576,534 633,673 Animal & vegetable oils & fats 23,133 35,712 47,047 31,737 Chemicals 42,284 67,711 105,407 116,839 Non-metallic mineral manufactures 20,032 32,241 41,847 33,267 Iron & steel 17,108 44,653 49,439 35,033 Metal manufactures 21,858 20,681 29,086 21,353 Machinery incl electric 85,112 117,834 175,213 129,502 Transport equipment 58,593 102,213 152,108 119,044 Total incl others 402,510 715,631 970,944 816,010

$ m $ m Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan Dec Jan-Dec Imports cif 1993 1994 1995 1996 Exports fobb 1992 1993 1994 1995 Kenya 84 245 281 246 Spain 20 17 60 110 UK 51 91 127 104 France 21 17 56 68 Japan 39 58 99 66 Germany 17 13 47 67 India 25 47 61 47 Italy 9 9 30 46 UAE 16a 35 62 44 Netherlands 28 10 14 40 Germany 24 31 37 31 Poland 1 1 18 25 Italy 11224723UK 15102216 Total incl others 403 716 971 816 Total incl others 178 157 369 469 a Excluding crude petroleum. b Derived.

Sources: Ministry of Planning & Economic Development, The Republic of Uganda, Statistical Abstract; UN, Direction of Trade Statistics, yearbook.

EIU Country Report 3rd quarter 1997 © The Economist Intelligence Unit Limited 1997 Quarterly indicators and trade data 41

Rwanda: foreign trade (Rwfr m) Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Nov Imports cif 1992 1993 1994 1995 1996 Food, drink & tobacco 2,708 9,713 4,047 14,098 13,431 of which: cereals & products 577 5,580 2,196 5,795 5,864 sugar & products 705 636 331 1,109 1,318 Mineral fuels 4,603 5,180 1,675 5,429 6,790 Animal & vegetable oils & fats 1,263 2,444 1,061 2,354 2,647 Chemicals 5,082 6,479 2,424 8,534 6,688 Paper & manufactures 1,366 1,056 385 964 1,089 Textile fibres, yarns, fabrics & manufactures incl clothing 3,045 2,835 963 4,124 3,481 Non-metallic mineral manufactures 802 990 275 701 962 Iron & steel & manufactures 2,499 9,270 1,193 1,725 3,045 Other metals & manufactures 1,397 1,662 619 2,649 3,467 Machinery excl electric 3,685 5,620 739 2,809 4,394 Electric machinery 3,202 2,413 846 3,850 2,749 Road vehicles incl tractors 2,988 9,468 1,481 7,625 11,154 Total incl others 38,434 47,866 17,366 62,193 69,175

Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Exports fob 1992 1993 1994 1995 1996 Coffee 4,672 5,428 2,445 11,294 12,843 Tea 2,761 2,684 834 1,118 2,845 Personal effects 222 340 98 7,198a 15,632a Total incl others 9,139 9,766 4,056 21,929 34,201

$ m Rwfr m Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Nov Exports fobb 1992 1993 1994 1995 Imports cif 1993 1994 1995 1996 Brazil n/a n/a n/a 70 EU 19,708 6,651 20,919 27,000 Belgium-Luxembourg 17 16 18 22 of which: Germany 24 31 12 12 Belg-Lux 7,714 2,658 8,270 12,131 Netherlands 14 10 7 12 Germany 2,875 841 3,278 3,321 Italy 5 3 2 3 ZEP 12,139 5,641 23,118 22,581 UK 4323 of which: Total incl others 197 100 75 154 Kenya 4,594 2,358 14,843 13,374 UAE 395 170 3,699 4,340 Total incl others 47,866 17,366 62,193 69,175 a Inflated by withdrawal of UNAMIR. b Source, DOTS.

Sources: Banque Nationale du Rwanda, Statistiques economiques et financieres; IMF, Direction of Trade, yearbook.

EIU Country Report 3rd quarter 1997 © The Economist Intelligence Unit Limited 1997 42 Quarterly indicators and trade data

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

Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Exports foba 1992 1993 1994 Imports cif 1994 1995 1996 EU 4,791 22,579 26,024 EU 24,099 29,346 16,977b of which: of which: Germany 2,291 8,012c 7074c Belgium-Luxembourg 7,869 8,963 5,731 Belgium-Luxembourg 417 10,682c 12,380c Germany 2,937 4,738 3,296 Rwanda 1,250 1,699c 2,021c France 6,415 5,851 3,196 USA 1,250 728c 1,769c Saudi Arabia 2,718 5,154 4,893 Total incl others 15,414 36,903 44,216 Japan 4,448 3,345 2,492 USA 2,112 2,856 1,727 Kenya 2,481 2,399 1,392 South Africa 954 823 1,341 Zambia 1,836 1,932 1,298 China 2,323 2,343 1,282 Total incl others 56,468 58,200 37,332 a Source, DOTS. b Excluding Finland. c Derived.

Source: Banque de la république du Burundi, Bulletin mensuel; IMF, Direction of Trade Statistics, yearly.