Stay or go? As economy crumbles, Burundi's merchants eye exit.
A protracted and violent political crisis in Burundi is forcing a successful mercantile class to reconsider their options.
Ameet Mandal stands by a row of plastic-covered stools, surveying his latest venture: a trendy eatery that he had hoped would become as successful as his family’s other businesses.
His is among a cadre of prominent Burundi-Indian families that have for decades been entrepreneurial forces in the central African country, running businesses in sectors like healthcare, hospitality, retail – and keeping the economy afloat.
But Mr. Mandal's restaurant's launch was put on hold last spring after President Pierre Nkurunziza’s bid for a third term sparked a deadly political crisis that has wrecked the capital's economy. Peace talks have floundered and Mr. Nkurunziza has dug in his heels, leading the UN to warn of a risk of another civil war, a decade after the last war ended.
Now Mandal – not his real name – says he and other families are reconsidering their investments in Burundi and looking at more stable neighboring countries. At a certain point, he adds "we’ll need to decide if we’ll stay open…if we’ll need to look outside Burundi.”
Mandal's grandfather arrived here in the 1940s, part of a wave of Indian migrants setting up shop in East Africa. Two generations later, after a tumultuous independence from Belgium in 1962 and two civil wars, the business outlook is grim. Last week, the African Union said it would not deploy a peacekeeping force to Burundi without Mr. Nkurunziza’s support.
“The first few months of the crisis were really, really bad… a whole mess,” says Mandal. “2015 started very well. But then we started feeling the political situation. Since then, it’s been the worst year since we opened.”
'Things are at a standstill'
Business is down all around Bujumbura. At the central market, vendors complain that the cost of beans and potatoes, dietary staples here, have doubled in price. Other sellers have abandoned their stalls. And earlier this week, students across several campuses of the University of Burundi protested the implementation of a new “no breakfast” policy to cut costs.
The International Monetary Fund estimates that Burundi's economy shrank last year by 7 percent. And according to data provided by Burundi’s revenue services, tax collection has collapsed; revenues in the year to June 2015 shrank by more than a third from a year earlier. The government has blamed the slowdown on tax evasion, but analysts say it is more likely due to the weak economy and the flight of the middle and upper classes from Bujumbura.
“Bujumbura is the heart of the Burundian economy. All the banks, the airport, the commerce is here,” says Jean Bosco Nzosaba of Observatoire de L’Action Gouvernementale, a public finance advocacy group. “When the situation in Bujumbura is bad, the Burundian economy is bad."
And while the situation in the capital is dicey, “we don’t know how rural markets have been affected,” says Cara Jones, an assistant professor of political science at Mary Baldwin College in Staunton, Va., who expects things could be worse in the countryside.
Daniel Waraich, another business owner from a well-connected Burundi-Indian family who does a lot of business with the government and has yet to be affected, but the picture remains grim. “We don’t hear of new projects. It’s very visible that no new businesses are being created. Things are at a standstill.”
Business is political
For Mandal, doing business in Burundi means remaining above the political fray as his family has done for generations. It is why they still call Burundi home, despite the instability.
But politics and the economy are strongly tied here. Moreover, over 40 percent of Burundi's budget comes from international donors, many of whom the government has alienated in recent months. Former colonial power Belgium has suspended direct aid to Burundi while continuing to fund nongovernmental programs.
Joblessness and poverty fueled last May's youth-led protests; many complained that jobs were handed out based on political affiliations.
“I have friends on both sides [of the political divide],” Mandal says, a fact that forces him not to get involved. He asked that his name be changed for this article because he wants to remain politically neutral. “We have clients from opposition, we have clients from the government. We don’t get involved.”
He says some of his businesses have seen their profits cut in half during the political crisis, making it difficult to pay salaries and rent, he says. Also, his employees have fled.
For now, he hopes this conflict, like the last two, will fade away before he is forced to relocate to another country like neighboring Kenya and Rwanda.