2010-04-02
BUJUMBURA (Reuters) - Burundi needs $5.8 billion for infrastructure such as telecommunications, electricity and transport projects over the next two decades, a study by the government and African Development Bank (AfDB) showed on Friday.

The tiny central African nation is recovering from years of civil war in the mid-1990s that halted development and impoverished its citizens.

Only 2 percent Burundians have electricity, compared with an average 16 percent in sub-Saharan Africa, while only 3 percent of the population has access to a landline or mobile phone, and 90 percent of them are in urban centres, the report said.

"In preparing this report, it becomes very clear to us that infrastructure is key to linking Burundi with its neighbours, is key to linking Burundi with the entire continent, and is key to position Burundi in a rapidly changing global environment," said Aloysius Uche Ordu, an AfDB Vice President and author of the report.

"So the purpose ... is to provide a broad framework around which all of us as key development partners can begin to have a conversation on how best to overcome the huge infrastructure gaps that Burundi faces, like many countries in Africa."

Burundi and AfDB anticipate the coffee-growing country of 8 million people would reach annual GDP growth of 6-7 percent once those key infrastructures are in place.

One of the main objectives of the project is to boost electricity access to 25 percent by 2020 while ensuring constant supply throughout.

It also aims at rehabilitating and paving all 1,960 km (1,218 miles) of the country's main roads and extending neighbouring Tanzania's rail system to Burundi.

The landlocked country relies on the Kenyan port of Mombasa for trade, which often drives up the costs of merchandise and exposes the country to uncertain supply if the route is disrupted, like when Kenyan had post-election violence in 2008.

Transporting a tonne of fertiliser from the Mombasa port costs $230, $100 more than the regional rate, the report said.

"Low levels of infrastructure also translate into much higher costs, with service costs running at two or three times that of other countries," an AfDB statement said. "In agriculture, transports costs are 35 percent of import prices and 40 percent of export prices."

Burundi will require some $160 billion in donor funding over the next 10 years, the report said. AfDB said the country receives $450 million annually in aid from all sources.

The government, private sectors and donor countries are the proposed funders of the infrastructure plan, Ordu said.

Exploitation of Burundi's nickel reserves, estimated at 258 million tonnes, is also key in lifting the country out of poverty, AfDB said. The report assumes mining taxes and royalties would earn Burundi an estimated $200 million annually.