Foreign currency shortages bite in Burundi

REUTERS

Authorities in Burundi on Thursday said more than 40 people have been arrested since the penalties for black market trading were increased last month.

The central African country has been short of foreign currency since foreign aid was frozen in 2016, after President Pierre Nkurunziza ran for a third term despite protests from opponents who said he was violating the terms of a deal that ended a civil war.

A spokesman of the public security ministry said on Wednesday that those who had been arrested were accused of “breaching the central bank regulation on foreign exchange”.

The dollar fetches about 2,900 Burundian francs on the streets of the capital Bujumbura, nearly double the official rate of 1,876, traders said.

The central bank said in October that official reserves in the first quarter of the year covered only three weeks of imports, and has not answered requests for more recent information.

Dollars are sold at the official rate only to importers of essential goods such as fuel and fertilizers.

Many businesses say they are unable to import merchandise and could be forced to shut down. One woman who imports decorations for weddings said she could no longer pay for supplies.

“We no longer make profits since we cannot continue increasing the prices of our goods in order to avoid losing clients,” she said.

A dozen foreign exchange traders in Bujumbura said that, because they could not buy dollars at the official rate, they purchased them from neighboring Democratic Republic of Congo to sell on the black market.

“To avoid arrests by the police, hard currency is now exchanged secretly with friends or acquaintances,” said a trader who declined to give his name.

READ MORE: Africa’s foreign currency problem

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Africa: foreign currencies in short supply

Philemon Mbale NSONGAN

  

Today we reflect on the problem of the currency crisis in several African countries…
From Nigeria to Zimbabwe to the Central African states, the problem is real.

The dollar, the euro and the pound sterling, which are widely used in international trading, are in short supply.

Much has been said about the origin of this situation.

Beyond the fact that economies are essentially extroverted; oriented towards satisfying external needs, beyond the structure of African economies refractory to the transformation of their own raw materials to specialize in exports of raw materials. This situation should challenges our states as a priority.

How do we get out of this? Many, like the analyst Idriss Linge, believe that it is imperious to transform the structure of African economies from top to bottom, so that they cease to be mere powder suppliers of raw materials to the rest of the world…

Certainly we can question the role of certain companies and multinationals that export the essential, if not all their benefits…

Some companies, businessmen and even individuals can be blamed for their currencies in foreign bank accounts. Accentuating the currency crisis…

Economic intelligence specialists we consulted during the preparation of this segment implore with all their hearts the advent of strategic states in Africa… They underline a kind of physical inactivity, lack of audacity, lack of revolt of our states…

In Africa it is still normal to import most of what we eat while arable land in abundance suffers from fallow.

In Africa, it is normal to import biscuits, eggs, mineral water, needles, etc… In short, to squander the rare currencies laboriously acquired to obtain products that are within our reach…

President Buhari, whose country spent $503 million on food in 2018, has been hostile to spending precious dollars now to buy food that can be produced…

And $503 million, I would point out that this is the profit made in China in 2015 by the American car manufacturer General Motor…

This is the amount that the continent’s largest economy spent in 2018 to import rice only.

It is thinking time for Africa

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