Burundi allows sugar, cement imports to tame black market
Wednesday August 10 2022
Smallscale traders in Bujumbura. The shortage of processed goods in Burundi is driving citizens to the black market. FILE PHOTO | AFP
Burundi is set to open a window for importing sugar and cement to meet a shortfall that has created a black market where prices have shot up.
This was revealed through a Cabinet statement released Wednesday following a Council of Ministers meeting in Gitega last week.
“There are discrepancies between the reference prices and the actual prices on the market,” the Cabinet said, adding that efforts to enforce official prices have been in vain.
State-owned producers have also been seeking a price review, particularly beer maker Brarudi and cement manufacturer Buceco since 2021, for reasons including soaring raw materials and transport costs.
“Given the production capacities of these companies, it is not clear that these products will be available even after the price increase,” the Cabinet noted.
The government noted that State-run Sosumo’s sugar and Buceco’s cement were insufficient and approved “other operators with sufficient financial capacity a gateway to import these products.”
The government said it would also accelerate the revamp of the sugar miller Sosumo to increase its production capacity.
Price increases
Beer maker Brarudi proposed increasing prices per bottle between 200 Burundian francs ($0.098) to Bf600 ($0.29) based on product type.
On its part, Buceco wanted to raise the price of a bag of its Cement 32.5R by Bf3,000 ($1.47). The official cement price is Bf24,500 ($11.99) but retails at Bf32,000 ($15.66) on the black market.
But the government says the two companies must first show how they plan to increase production to meet current demand.
The Trade, Community Development and Agriculture ministers were also tasked with creating modalities to help Brarudi on its quest to cultivate sorghum.
The Cabinet also directed the enforcement of official prices since there is no corresponding tax increase when the commodity costs rise.
Fuel shortage
In addition to the biting sugar and cement shortage, Burundi has also witnessed a shortfall of fuel, with long queues still seen in the commercial hub Bujumbura.
“I have spent two days here queuing for fuel, and yet I don’t know if I will get it,” a taxi driver in the former capital said.
The frustration is also driving motorists to the black market.
Currently, a litre of petrol costs Bf3250 ($1.59) while that of diesel costs Bf3450 ($1.69).
“We sometimes go to the black market in Buyenzi where a litre of petrol is bought at Bf8,000 ($3.91),” said another taxi driver.