Overview
Burundi is known as the “heart of Africa” and is located in the Great Lakes region of Eastern Africa. It covers an area of 27 834km2 of which 25 650km2 is land and 2 180km is water. The country is predominantly rural and relies mainly on agricultural activities as a source of livelihood. It is among the poorest countries in Sub-Saharan Africa with an estimated per capita income of US$261 in 2019.[1]
With a total population estimated at 11 890 781 in 2020[2], Burundi is one of the most densely populated countries in Africa with 435 people per square kilometre as of 2018.[3] The population growth rate is approximately three percent.[4] The rate of urbanisation remains one of the lowest globally at 13 percent.[5] The housing market in Burundi is characterised by insufficient supply and an ever-growing demand caused by a dynamic demography.[6] The country presents specific factors of poverty that affect the supply of housing which are: demography, density, low urbanisation and the problem of natural disasters. To overcome the housing supply challenge and meet the needs of the population, Burundi will have to develop each year by 2030 an area of 855 hectares of land and build 25 631 housing units, more than half – 14 365, in urban areas.[7] Energy infrastructure development is woefully inadequate with low electricity access of 2 percent in the rural areas and 58.5 percent in urban areas as of 2016.[8]
Agriculture remains the principal economic activity, accounting for 40.7 percent of the Gross Domestic Product (GDP) in 2018 and employing 90 percent of the working population.[9] In 2019 GDP increased by 3.3 percent because of high coffee exports, a slight increase in public investment and particularly high agricultural production.[10] Before the global COVID-19 pandemic, the country’s economy was expected to grow by 3.7 percent in 2020 and 4.3 percent in 2021 on the back of high coffee exports combined with a slight increase in public investment, average growth of 6 percent in food production and a steady prudent monetary policy.[11] The increase in public expenditure not being offset by good economic performance has meant that the fiscal deficit rose from 3.3 percent in 2018 to 4.2 percent in 2019. Nevertheless, it must be noted that the budget deficit was financed by means of advances received from the central bank and the accumulation of domestic payment arrears.[12]
The risk of debt distress remains high at 63.5 percent of GDP in 2019 compared to 58.4 percent in 2018 because of increased domestic debt. The inflation rate decreased from 16.1 percent in 2017 to 3.1 percent in 2019 resulting in the drop of food prices by almost 11 percent.[13] The COVID-19 pandemic is likely to impact negatively on all the economic indicators.
[1] World bank (2020) GDP per Capita (current US$§) https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=BI (Accessed 22 July 2020)
[2] Economic indicator (2020) Burundi economic indicators https://www.economy.com/burundi/indicators (22 July 22)
[3] World Bank (2020) Population density (people per sq. km of land area) Burundi https://data.worldbank.org/indicator/EN.POP.DNST?locations=BI (Accessed 22 July 2020)
[4] Central Intelligence Agency (2020) Africa Burundi https://www.cia.gov/library/publications/the-world-factbook/geos/print_by.html (Accessed 25 July 2020)
[5] Central Intelligence Agency (2020) Africa Burundi https://www.cia.gov/library/publications/the-world-factbook/geos/print_by.html (Accessed 25 July 2020)
[6] United Nations Habitat report 2012. Burundi : profil urbain national Pg.20https://mirror.unhabitat.org/pmss/getElectronicVersion.aspx?nr=3459&alt=1
[7] United Nations Habitat report 2012. Burundi : profil urbain national Pg. 20https://mirror.unhabitat.org/pmss/getElectronicVersion.aspx?nr=3459&alt=1
[8] Banque mondial (2020) Burundi : offrir un meilleur accès aux services et aux débouchés économiques aux habitants pauvres des zones rurales. Communiqué de presse n° : 2020/068/afr https://www.banquemondiale.org/fr/news/press-release/2020/02/28/burundi-to-improve-access-to-services-and-opportunities-for-the-poor-in-rural-areas (Accessed 29 September 2020)
[9] Economic indicator (2020) Burundi economic indicators https://www.economy.com/burundi/indicators (22 July 22)
[10] African Development bank (2020) Burundi economic outlook https://www.afdb.org/en/countries/east-africa/burundi/burundi-economic-outlook (Accessed 25 July 2020)
[11] African Development bank (2020) Burundi economic outlook https://www.afdb.org/en/countries/east-africa/burundi/burundi-economic-outlook (Accessed 25 July 2020)
[12] African Development bank (2020) Burundi economic outlook https://www.afdb.org/en/countries/east-africa/burundi/burundi-economic-outlook (Accessed 25 July 2020)
[13] African Development bank (2020) Burundi economic outlook https://www.afdb.org/en/countries/east-africa/burundi/burundi-economic-outlook (Accessed 25 July 2020)
Access to Finance
The financing landscape in Burundi is dominated by a few commercial banks, including Banque de Crédit de Bujumbura (BCB), Banque Commerciale du Burundi (BANCOBU), Interbank Burundi (IBB), Banque de Gestion et de Financement (BGF), Finbank, Banque Burundaise pour le Commerce et l’investissement (BBCI), Diamond Trust Bank Burundi (DTB), Kenya Commercial Bank Burundi (KCB Bank Burundi), Cooperative for Rural Development Bank (CRDB Bank Burundi) and Ecobank Burundi. These are complemented by other financial intermediaries mandated to give loans and to borrow but having neither counters nor accounts for the clientele. Institutions in this category include Banque Nationale pour le Développement Economique (BNDE) and Fonds de Promotion de l’Habitat Urbain (FPHU). Additionally, some sections of the population regularly access credit from microfinance institutions located in both urban and rural areas. The three categories of lending institutions have all been significantly affected by the low level of business activity over the COVID-19 period.
Movement restrictions initiated by the government as key containment measures for COVID-19 resulted in a slump in economic activities across major sectors of the economy, including housing and construction. Regional border closures further reduced finance to support trade and cross-border imports. Several business entities therefore resorted to placing funds in commercial banks as deposits at the expense of increasing the productive capacity of the economy. Consequently, customer deposits increased by 27.1% to FBu2.351.9 billion (US$1.19 billion) in the fourth quarter of 2020 from the fourth quarter of 2019. Related to this, the level of central bank refinancing to commercial banks fell by 30.0% from December 2019 to close the year at FBu299.1 billion (US$150.98 million).
The trend was also evident in the credit market as there was a notable increase in the non-performance of loans as a measure of the prevalent credit risk. Overdue loans increased by 14.0%year-on-year to close the year 2020 at FBu139654.4 million (US$70.5 million) from FBu122533.3 million (US$61.9 million) registered in December 2019 . Similarly, the shares of the watch and substandard loans grew respectively by 50.3%and 8.5%in the fourth quarter of 2020 from 46.9%and 7.4% in the corresponding quarter in 2019. This points to a deterioration in borrowers’ ability to repay facilities as economic conditions became tougher on account of lower business activity during the pandemic. The deterioration also highlights possible challenges for the stability of the banking industry on account of potential defaults arising from the substandard facilities on the lenders’ asset book. The magnitude of the bank’s write-off of losses will strongly depend on the speed of economic recovery across major sectors of the economy, including building and construction, alongside tailored bank responses to the challenging credit market.
To avert the increasing credit risk in the loan market to specific sectors including housing, education, and hospitality, financial institutions resorted to expanding their lending to the government. As of April 2021, the banking sector balance sheet increased by 21.6% year-on-year, with total assets standing at FBu4.124.5 billion(US$ 2.1 billion) from FBu 3.392.8 billion (US$1.7 billion) in April 2020. This increase resulted from the rise of Treasury securities (20.0%) and loans to less risky customer segments (25.0%). Unsurprisingly, the share of Treasury securities in total assets remained predominant compared to other assets. It stood at 40.8% of total assets by the end of April 2021 from 41.3% by the end of April 2020. The share of credit to the private sector grew marginally to 35.3% of the total assets from 34.3%in 2020.
To support the growth in lending to the key growth sectors and the government, the banking industry witnessed a 29.5% growth in customer deposits amounting to FBu 2475.5 billion (US$1.25 billion) at the end of April 2021 from FBu1911.0 billion (US$964.6 million) at the end of April 2020. Due to this growth in deposits, the level of central bank refinancing to credit institutions declined by 22.1%, standing at FBu337.5 billion(US$170.4 million) at the end of April 2021 compared to FBu433.0 billion (US$218.6 million)at the end of April 2020,23signifying an increase in the availability of credit for lending purposes for private sector growth.
The outlook in the credit market points towards improved access to finance with a notable reduction in credit risk, particularly over the first quarter of 2021. The quality of loans portfolios improved slightly as at the end of April 2021, as reflected in the positive movement in the rate of non-performing loans to 4.5% in April 2021 from 5.3% in December 2020. Notable year-on-year movements have been recorded for key sectors including construction (3.6% from 6.7%), tourism (12.2%from 39.5%), agriculture (17.1%from 21.7%), industry (0.6%from 0.8%), and trade (4.1%from 5.0%). Even on the back of the improvements in portfolio quality related to the housing sector, a number of financial institutions still remain apprehensive about advancing credit to this sector on account of the low-income levels among the majority of the population, with likely implications for their ability to service long-term mortgages.
[1] Banque de la république du Burundi (2020) Marche financier https://www.brb.bi/fr/content/dispositions-l%C3%A9gales-et-r%C3%A9glementaires-0 (Accessed 2 August 2020)
[2]Banque de la république du Burundi (2020) Enquête nationale sur l’inclusion financière au Burundihttps://www.brb.bi/fr/content/enqu%C3%AAte-sur-l%E2%80%99inclusion-financi%C3%A8re-1 (Accessed 2 August 2020) Pg. 2.
[3] Banque de la république du Burundi (2020) Enquête nationale sur l’inclusion financière au Burundi https://www.brb.bi/fr/content/enqu%C3%AAte-sur-l%E2%80%99inclusion-financi%C3%A8re-1 (Accessed 2 August 2020) Pg. 3
[4] Banque de la république du Burundi (2020) Commercial and other financial intermediaries 2020 first quarter of March 2020 https://www.brb.bi/fr/content/monnaie-et-cr%C3%A9dit (Accessed 2 August 2020)
[5] Agence ecofin (2020) Le Burundi bénéficie d’une subvention de 24,9 millions $ du FIDA en faveur de l’inclusion financière agricole www.agenceecofin.com/aide-au-developpement/0610-50939-le-burundi-beneficie-d-une-subvention-de-24-9-millions-du-fida-en-faveur-de-l-inclusion-financiere-agricole (Accessed 20 September 2020)
[6] Iwacu (2020) Les enseignants n’ont plus foi dans le Fonds de logement du personnel www.iwacu-burundi.org/les-enseignants-nont-plus-foi-dans-le-fonds-de-logement-du-personnel/
[7] United Sates of America Department of State (2020). 2019 Investment climate statements: Burundi www.state.gov/reports/2019-investment-climate-statements/burundi/ (Accessed 2 August 2020)
Affordability

Recent economic lockdowns, alongside border closures, have compounded the housing affordability challenge for most residents. The affordability of decent housing remains out of reach of most Burundians, who survive by way of subsistence agriculture. Against this low-income background, demand for decent housing, even in the affordable market segment remains low.
From an external diagnostic view, the country appears to provide a fertile ground for investors in residential and commercial housing space. However, the low-level uptake for the few developed properties poses a scalability challenge for housing developers, which then translates into high costs of delivery of housing units and low levels of affordability for those units among low-income earners. Most low-income earners are sheltered in slums by way of self-built houses. Information from UNICEF reveals that only 61% of the population could obtain safe drinking water within a 30-minute round-trip from their households in 2017. Additionally, access to basic sanitation is quite limited to the extent that only 46% of the population had access to at least basic sanitation facilities in 2017 compared to 45% three years later in 2000. The provision of basic services to the bulk of citizens in both rural and urban areas remains a problem. Existing water and sanitation infrastructure is in a poor state of repair while other areas have no clean water or sewerage facility infrastructure. Rethinking the delivery of such housing support services will be instrumental in addressing the housing affordability challenge for Burundi’s growing population.
On the lending side, interest rates for housing-related and other sector finance have remained high at an average of 15.23% over the past two years, further worsening the affordability challenge for most Burundians.
[1] Burundi-eco (2020). Premier logement : des recours qui ne tiennent pas la route https://burundi-eco.com/premier-logement-des-recours-qui-ne-tiennent-pas-la-route/#.X1o_AYs69PY (Accessed 5 August 2020)
[2] Burundi-eco (2020). Premier logement : des recours qui ne tiennent pas la route https://burundi-eco.com/premier-logement-des-recours-qui-ne-tiennent-pas-la-route/#.X1o_AYs69PY (Accessed 5 August 2020)
[3] Burundi-eco (2020). Premier-logement : des recours qui ne tiennent pas la route https://burundi-eco.com/premier-logement-des-recours-qui-ne-tiennent-pas-la-route/#.X1o_AYs69PY (Accessed 5 August 2020)
[4] Institute of Statistics and Economics Studies of Burundi (2020). Statistics and studies https://www.insee.fr/en/statistiques ( Accessed 5 August 2020)
Housing Supply
The country has, however, offered few prospects for developer firms in the housing supply value chain. The biggest challenge faced on the supply side is the limited level of market uptake available for the few existing units. This is large because of high poverty rates and a thin middle class.
Recent spikes in COVID-19 infections worsened the already fragile housing supply value chain. Whereas the major containment measures focused on keeping people confined in homes, few initiatives were taken to improve the stock of housing in the country. The closure of land borders with Rwanda for both goods and people placed further strain on the building and construction sector as imported construction materials move across this border. Between March and August 2020, when the borders were reopened, the country experienced delays in completing building and infrastructure projects that were already underway. The rise in the prices of imported construction materials on the back of surging inflation rates continues to put upward pressure on the prices of residential and commercial real estate properties in the country.
Driving recovery in the housing sector and other growth areas of the economy will require concerted efforts from the government and private sector entities. To date, efforts from the Burundian government have not yielded significant gains in housing sector developments. Government attempts to provide housing support services including electricity and water have yielded minimal results, translating into 7% of the total population being connected to the national electricity grid, with 49% registered in urban areas while under 1% is recorded for rural areas. Efforts to boost the supply of housing units will need to comprehensively cover housing support services including power, sanitation, and transport infrastructure as the country rebuilds under the new government.
[1] United Nations Habitat (2020) Covid 19 in African cities: impacts, responses and policies recommendations Pg. 16
Property Markets
Burundi is ranked 166 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. Although the country’s ranking improved slightly to 166 in 2019 from 168 in 2018, the business environment remains dampened by bureaucracy and inadequate business support services.COVID-19 has highlighted the need for accelerating digital adoption in Burundi. The country’s current sector strategies emphasise the importance of investing in digital technology across all sectors, including housing and the land registry. The country has no digital land registry system, in an era where online service delivery has become the norm. Attempts initiated in 2018 to design and implement a Land Information System (LIS) have not yet been actualised. A few property dealers have, however, moved a step ahead of government initiatives with the introduction of an online listing of marketed properties. These largely offer properties available in the secondary market. Notable is that these listed properties appear to target the upper-income earners, as the pricing is on average above FBu 99 million (US$50 000). The affordable housing challenge, therefore, remains unsolved and is unlikely to get adequate attention in the short to medium term on account of prevalent extreme poverty levels. Efforts to address the affordability of decent housing, therefore, need to be integrated with growth strategies aimed at boosting the overall income levels across the majority of productive sectors in Burundi.
[1] Fortune of Africa (2020) Profile of real estate sector in Bururndi https://fortuneofafrica.com/burundi/profile-of-real-estate-sector-in-burundi/ (Accessed 20/8/2020)
[2] African Development Bank (2020) Africa economic outlook 2020 supplement Amid Covid 19 https://www.afdb.org/sites/default/files/documents/publications/afdb20-04_aeo_supplement_full_report_for_web_0705.pdf Pp 15(Accessed 20 August 2020)
[3] African development bank (2019) African Economic Outlook, 2019 https://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/2019AEO/AEO_2019-EN.pdf Pp 19
Policy and Legislation
The 7th pillar of Burundi’s Vision 2025 points to the strategic intent of the country in terms of Burundi’s management of urbanisation. More specifically, policymakers seek to establish a proactive policy of village development and urbanisation that will entail growth in the rate of urbanisation to 40% by 2025. Additionally, the management of Burundian territory will be an integral component of the economic and social development policy of the country.
Overall, the anticipated policy of regional planning and urbanisation will be particularly focused on the development of rural areas with the objective of providing an enabling environment for new investments. The envisaged developments will stimulate agro-based productive ventures which in turn will generate employment,fast track the development of affordable housing, and improve the delivery of quality of social services and transport infrastructure. The development of towns and villages in the country will also contribute to monetising the national economy.
[1] République du Burundi (2016) cabinet du président de la république Pp 2
[2] United Nation Habitat report 2012) Burundi : profil urbain national. Pg. 14 12https://mirror.unhabitat.org/pmss/getElectronicVersion.aspx?nr=3459&alt=1
[3] United Nation Habitat report 2012) Burundi : profil urbain national Pg15 12https://mirror.unhabitat.org/pmss/getElectronicVersion.aspx?nr=3459&alt=1
Opportunities
The need for decent affordable housing in Burundi continues to grow at a fastpace on the back of a growing population and a return to normality after a period of civil strife and COVID-19. Enormous opportunities exist for property developers focusing on the bottom-of-the-pyramid segment of the population. With a 13% urban population, Burundi is the least urbanised country in the Eastern and Central African region. However, it is also one of two countries with the fastest growing urban population in the region, with an urbanisation rate of 5.7%.As a result, the urban population is estimated to increase by 22% by 2040 to 4,5million, and double by 2050.
However, allianceswill have to be established to deliver on this ideal. The government and stakeholders across the housing value chain need to establish formal partnerships aimed at delivering mass housing projects for the bulk of the country’s low incomepopulation. Additional opportunities in housing microfinance services do exist, particularly in rural areas,where formal banking institutions have no representation. Most of the farming population in such areas could be organised in ways that promote group lending, with repayments structured to coincide with the agricultural harvest seasons. Further attention could be placed slum redevelopments in light of the growing nature of unplanned settlements in the country. However, the slum development initiative will require heavy reliance onthe government agencies which have not shown much dynamism in the housing development ecosystem.To-date, the country has not yet developed a comprehensive framework for slum upgrades. The development and implementation of such a framework would ensure that slum area residents are given secure ownership to the land parcels they now occupy, and thisin turn would work as collateral for mortgage-related borrowing in support of incremental building for the low income earners.
[1] World Bank (2020)
[2] United Sates of America Department of State (2020). 2019 Investment climate statements: Burundi www.state.gov/reports/2019-investment-climate-statements/burundi/ (Accessed 2 August 2020)
Availability of data on housing finance
The main source of housing finance information is data routinely published by Burundi’s central bank.The central bank provides monthly and quarterly information on monetary aggregates, credit extension, public debt,and other measures of economic sector performance over specified time intervals.Additional information of statistical nature is obtainable from L’Institut de Statistiques et d’Etudes Economiques du Burundi (ISTEEBU) which provides information on a monthly, quarterly,and annual basis,derived from demographic and economic surveys.There is no digital land registration system, however there are plans to design and implement a Land Information System (LIS).
According to UNICEF, Burundi is one of the few countries in which access to basic sanitation in urban areas is lower than in rural areas.Although 78% of the population in rural areas and 98% of the population in urban areas had access to improved sources of drinking water in 2017, only 61% of the population could obtain safe drinking water within a 30-minute round-trip from their households. Additionally, only about 46% of the population in rural areas have access to basic sanitation facilities. For urban dwellers in the country, the proportion ofhouseholds with access to basic sanitation facilities is much lower at 42% .
Websites
Central Bank of Burundi: https://www.brb.bi/
IFAD-Burundi https://www.ifad.org/
International Monetary Fund:https://www.imf.org/en/
Countries/BDIWorld Bank:https://www.worldbank.org/
African Development Bank:https://www.afdb.org/
Additional Sources
World Bank report –Burundi Country Overview (2021)https://www.worldbank.org/en/country/burundi#:~:text=The%20World%20Bank%20in%20Burundi,capital%20and%20promoting%20social%20inclusion. (Accessed 21September-2021). Pg. 1.
World Bank Report -Burundi Recent Developments April 2019. http://pubdocs.worldbank.org/en/708231492188151479/mpo-bdi.pdf.