(DTIS) Update, Volume 1 – Main report - Enhanced Integrated ...

products, Figure 3.3 shows that Burundi’s shares of manufactures and high value primary products areextremely limited.100%80%60%40%20%0%Figure 3.3: Evolution of EAC countries' export structureMedium and high technologymanufacturesLow technology manufacturesResource-based manufacturesHigh Value Primary ProductsPrimary ProductsSource: authors' calculations based on Lall (2000); WB/DEC ; mirror exports from Comtrade/WITSUnlike its EAC partners, Burundi has not managed to diversify into manufactured products to asignificant extent over the last two decades (figure 3.3). The modest increase of manufactures’ share intotal exports is mainly due to the decreasing value of total exports (mainly coffee) since the late 1980s,rather than to a strengthening of the industrial base. Moreover, the actual share of manufactured products(especially complex ones) is most likely lower than trade statistics suggest, as these usually include reexportsof products like motor vehicles, machinery or electronics 63 . Overall, the low share ofmanufactures reflects the underdevelopment of the secondary sector, which produces few products andperforms poorly. Given the low competitiveness of the sector and the high structural barriers and costs itfaces, competing in global markets for manufactures will be a considerable challenge and is unlikely inthe short run (UNCTAD 2010). However, regional markets seem to be more reachable for some ofBurundi’s manufactures and could be used as an entry point to develop existing products, notablyresource-based/agro-industrial (beer, lemonade, sugar, cigarettes, soap, etc.) 64 .Local value-added in primary products in Burundi is particularly limited; primary productexports mainly consist of low-value, unprocessed commodities. For example, in 2010 Burundiexported over 18 thousand tons of green coffee, but no processed coffee 65 . Without neglectingcommodity coffee, Burundi should exploit its potential to enter fast-growing specialty coffee markets(e.g. gourmet, fair-trade, organic, local/regional branding), for which customers are willing to pay apremium 66 . Likewise, tea is exported in bulk, with no additional processing or marketing, and hides andskins are exported raw or with very limited preparation.Burundian exports – like most African exports – are characterized by a low survival rate. Thedecomposition of Burundi’s export evolution between 2004 and 2010 shows that the “shrinking exportrelationships” and “death of exports” categories are the significant . Reducing such infant exportmortality is key to generating sustained export growth and job creation. Recent work by the World Bankfocusing on four African countries (Tanzania, Malawi, Senegal and Mali) has identified that network63 http://legacy.intracen.org/countries/metadata00/technote.htm#Burundi64 Burundi’s state-owned textile factory (COTEBU) stopped producing in 2007 due to poor performances andfinancial difficulties (PAGE 2009), but the concession obtained by a Mauritian textile operator in 2010 shouldenable production to resume progressively (http://mininfo.burundi-gov.bi/spip.php?article1616).65 www.ico.org/countries/burundi.pdf66 See World Bank (2011c) for an analysis of the potential and constraints to enter specialty coffee markets.57 / 153