Sources of Growth in Post-Conflict Burundi: From Destruction to Production

Burundi, a small fragile economy, went through sporadic civil war since its independence in 1962 during which rampant insecurity had adverse impact on the country’s social and economic development. While Burundi is agriculturally rich, high rate of growth of rural population places overwhelming pressure on limited land resources. It is widely recognized that without significant growth in agriculture it will be virtually impossible to address poverty reduction. Given the high population density and limited off-farm employment opportunities, enhancing agriculture productivity is key for sustainable economic growth and improving the living standard of rural families. This paper highlights the importance of: - Improved technology packages (at the production, post-harvest, processing and marketing stages). - Building the capacity of producers’ organizations. - Irrigation development (marshland irrigation systems) and conservation measures. - Basic rural infrastructure (feeder roads). - Increasing the production and improving the processing and marketing of high value export crops (coffee and tea) and diversifying agricultural exports (horticulture). To examine the roles of aforementioned factors, the paper employs a structural composition model. In so doing, it provides quantitative evidence that Burundi’s economic growth is largely determined by total factor productivity (TFP), which in turn is affected by macroeconomic policies and stability, and infrastructural and institutional quality.