Soaring prices are affecting the daily lives of Burundians. For more than a year, we have been witnessing a generalized and continuous rise in food prices. The figures published by the National Institute of Statistics of Burundi, ex-ISTEEBU are cold on the back. Food inflation is not abating in the market. “Annual inflation reaches 28%. This price increase is largely driven by food prices and non-alcoholic beverage prices. These recorded a 40% increase between February 2022 and February 2023”, reads the price barometer of the National Institute of Statistics of Burundi.
Benjamin Kuriyo, Director of publications
Usually, prices should fall during the harvest period and then rise at least during the sowing and planting period. Which is not the case. The prevailing situation smashes all the forecasts of economists and the tendencies of the Bretton Woods institutions. Today, food inflation is out of the ordinary. To understand this phenomenon, it is necessary to closely analyze the socio-economic environment of the country.
The interventionism of the authority in fixing the prices of basic necessities has disrupted the marketing of foodstuffs. With the operationalization of the famous crop management agency (ANAGESSA) in 2021, the situation has worsened. The price of a kilo of dry corn, which cost 400 FBu at the time, rose to 1,300 FBu (February 2022) to peak a year later at 2,000 FBu (February 2023). Furthermore, the collection of maize has paved the way for speculative traders.
These were being squeezed out of the food supply chain. This at a time when the constitution of public stocks did not contribute to price stability on the market. For example, between February 2022 and February 2023, the price of beans, a supposed staple food for Burundians, increased of 133%.
The government tried to regulate grain prices, but it was too late to stop the price spike. The consequences of the double crisis of the Covid-19 pandemic and the Ukrainian conflict were already noticeable with the increase in fuel prices which exploded transport costs. This affects the end consumer. Civil society also evokes galloping demography. So there are a lot of mouths to feed as production goes downhill.
In addition, the year 2022, which was declared as an agricultural year, was characterized by a glaring lack of fertilizers for cropping seasons A and B. The vagaries of the weather punctuated on the one hand by torrential rains accentuated erosion of the ground. And on the other hand, the prolonged drought in the regions of Kumoso, Imbo and Bugesera has affected the agricultural yield. Added to this is the lack and/or high cost of seeds and the low availability of agricultural monitors to supervise farmers, which has called into question the government’s efforts to increase agricultural productivity.
The country would therefore have to import foodstuffs to meet the growing demand. However, the persistent shortage of foreign currency has weakened the national economy, an economy that is struggling to recover from the effects of the socio-political crisis of 2015. On this point, the government and civil society are broadcasting on the same airwaves . The economic crisis resulted from financial disorder in currency management and refinancing policy. Civil society cries out loud and clear regarding the bad governance that plagues the country, especially the opacity around currency management and public finance management.
Economically, hyperinflation plunges the country further into an economic recession. Consumers ration purchases. Their concern is to have something to eat. Due to budgetary constraints, they do without purchasing other items (clothes, shoes, etc.). The time is not in fashion!
Thus, economic activity is slowing down. Employees are not paid regularly or are forced to observe technical unemployment. Household poverty is on the rise. This inevitably leads to stagflation.
To win the battle once morest inflation, the government should stabilize the prices of the most consumed products. This is at least the opinion of the president of CURDES, Prof. Gilibert Niyongabo in an interview granted to our colleagues from the Iwacu press group. “…the government should subsidize purchase prices”. Some countries like Tunisia have been subsidizing foodstuffs for years (bread, meat, cereals, etc.), but this dose is difficult to apply in a context of over-indebtedness and economic recovery.
