Burundi Eco Large fertilizer subsidies destabilize the country’s fiscal situation

2023-04-28 14:43:09

Burundian farmers face various challenges including the lack of fertilizers in recent years. This despite the government’s desire to develop the agricultural sector. Even more, fertilizer subsidies have caused overruns in the government’s budget according to the IMF

“The fiscal situation is expected to deteriorate in the 2022-2023 fiscal year due to weak revenue collection due in part to large fertilizer subsidies.”

According to the statements of the International Monetary Fund, the large fertilizer subsidies have caused overruns in the general state budget for the 2022-2023 fiscal year. ” Fiscal situation is expected to deteriorate in FY 2022-23 (July-June) due to weak revenue collection due in part to large fertilizer subsidies », according to the recent press release announcing an IMF loan of USD 216 million to Burundi.

The subsidy for organo-mineral fertilizers, the restocking of livestock and the multiplication of selected seeds were estimated at 80 billion FBu in the State budget, fiscal year 2022-2023. For 2021-2022, fertilizer subsidies were estimated at FBu 15 billion. But, according to the IMF, overruns were recorded during this budget year. Are the overruns mentioned by the IMF linked to the desire to prioritize the agricultural sector? We remind you that the year 2022 was dedicated to the agricultural revolution by the number one Burundian. In his speech to the Nation, the Head of State said he wanted to bet on this sector for the country’s economic recovery. ” We start this year with the objective of restoring the economy, so that our country ceases to be part of the list of poor countries in the world. “, explained Evariste Ndayishimiye while specifying that the assets are united to get Burundi out of extreme poverty.

However, this year, Burundian farmers have experienced a critical lack of fertilizers. In a descent in September 2022 to the company FOMI, the ministers in charge of agriculture and community development noted the inadequacy of the fertilizers produced by this company and, subsequently, they estimated that there will be delays in the distribution of fertilizers to farmers for the cropping season A.

During this period, the amount of Imbura, Totahaza, Bagara and Dolomite fertilizers that was already distributed to farmers to prepare for cropping season A was less than 23%. Out of 50,000 tons ordered, FOMI had produced 17,000 tons.

An urgent need for fertilizer?

At the time the FOMI factory affirms that there will be no more problems related to the lack of fertilizers for farmers, the reality is quite different these days. The recent emergency aid from the African Development Bank (AfDB) proves that Burundi is in need of fertilizers. The AfDB will provide Burundi with USD 4 million for the emergency purchase of 3,000 tons of fertilizer for use during cropping season C.

It was the Minister of Finance, Audace Niyonzima who requested this support from the ADB on behalf of the Head of State. This was during his visit to this institution in Abidjan on April 7, 2023. Even more, the AfDB estimates that the fertilizer needs covering all phases are estimated at 145,000 tons. It will use two projects from its current portfolio in Burundi to meet the immediate needs of the first phase.

For the following phases, it is the African financing mechanism for the development of fertilizers that will be explored, as indicated by Akinwumi Adesina, President of the AfDB.

If the quantity of organo-mineral fertilizers manufactured by the FOMI company is not enough, the quality also questions more than one. Some farmers worry about its yield. Two years ago, Isabu, in collaboration with the FOMI company and the soil fertilization department, corrected the doses of FOMI fertilizers for three crops, namely potatoes, corn and rice.

For its part, FOMI informs that it is in the process of extending its factory to satisfy the local market and export the surplus.


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