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DE RUEHJB #0411 1560909
ZNR UUUUU ZZH(CCY SIGNATURE AD0CA538E MSI7027-536)
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FM AMEMBASSY BUJUMBURA
TO RUEHC/SECSTATE WASHDC 0341
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHLGB/AMEMBASSY KIGALI 0014
RUEHDR/AMEMBASSY DAR ES SALAAM 0011
RUEHKM/AMEMBASSY KAMPALA 0033

UNCLAS BUJUMBURA 000411 
 
SIPDIS 
 
C O R R E C T E D  COPY (SIGNATURE ADDED) 
 
SIPDIS 
 
FOR DEPT AND AF/C 
E.O. 12958: N/A 
TAGS: EAID EINV EFIN BY
SUBJECT: ADF IDENTIFIES POTENTIAL PROJECTS IN BURUNDI 
 
REF: BUJUMBURA 409 
 
¶1.  SUMMARY: During a May 20-27 visit to Burundi, African 
Development Foundation (ADF) representatives identified promising 
sectors for future support and attended Burundi's Donor Round Table. 
 ADF gauged the climate for economic development for small and 
medium sized enterprises and surveyed current market opportunities, 
focusing on coffee, juice and fruit production, and microfinance. 
Local businesses cited the need for affordable credit in order to 
expand their operations.  ADF also explored staffing and security 
issues with a view towards opening  an office in Burundi at the 
beginning of fiscal year 2008.  ADF met with the Burundian Second 
Vice President's office to further discuss the requisite 
ADF-Government of Burundi (GOB) Memorandum of Understanding (MOU). 
While the document is still unsigned, the GOB expressed strong 
support for ADF's assistance in Burundi. END SUMMARY 
 
¶2.  US African Development Foundation Regional Coordinator Christine 
Fowles arrived in Bujumbura on May 20 and was joined by ADF's Trade 
and Investment Advisor Don Welty on May 23.  Ms. Fowles and Mr. 
Welty met with local and international NGOs, government officials, 
businesspeople, and industry representatives.  In discussions with 
all partners, ADF stressed the importance of working directly with 
grassroots, African owned organizations that have a direct effect on 
every aspect of the supply chain, especially rural producers. The 
private sector opportunities are somewhat limited at this point 
given enterprise ownership that is often not entirely Burundian. 
On-going reforms in the coffee sector also will take place in the 
coming months and serve to better guide USADF's intervention 
strategy. In discussions with local NGOs, ADF's interlocutors 
responded favorably to ADF financing proposals and provided further 
contacts for consultation.  According to many of these 
organizations, the most prominent need for small and medium sized 
enterprises is capacity building. 
 
¶3.  ADF met with several business people in the coffee, fruit, 
cheese, livestock, and banking sectors.  The microfinance sector 
presents a possibility for ADF financing.  While ADF usually focuses 
on agro-processing and value-added programs that have the strongest 
potential for profitability, socio-economic impact and 
replicability, micro financing is an avenue that quickly and 
efficiently affects large numbers of individuals.  ADF expressed 
interest in working with those credit programs focusing on women and 
small farmers in the coffee and tea sectors, and especially with 
credit institutions having already received their accreditation as 
MFIs from the Central Bank of Burundi. In meetings with the Burundi 
Enterprise Network (BEN), ADF learned that the three major obstacles 
to growth in Burundi are the high taxes on imported items, the 
expensive and inconsistent energy supply (all electricity is 
produced hydroelectrically), and the usurious levels of interest on 
credit (18% - 21%) provided by local banks.  The BEN sees ADF's no 
interest loans as a great resource for its members.  Many 
organizations also highlighted the endemic corruption in Burundi and 
its crippling effect on business development, among other things. 
Other businesspeople stressed the importance of coffee to the 
Burundian economy and its people.  Estimates put the coffee sector 
as supporting as many as 800,000 farmers.  ADF also explored other 
opportunities to reach small producer associations through the 
Catholic Church development network. 
 
¶4.  In arguably ADF's most successful consultation, the local juice 
maker Fruito provided a tour of its factory.  In subsequent 
exchanges, ADF and Fruito identified several impediments to further 
growth of the company - structural, logistical, and financial.  None 
of these constraints are substantial and should not inhibit further 
development provided they are addressed by Fruito.  Improving the 
supply chain and working with farmers to increase and sell their 
fruit to an assured market has exciting potential and likely 
significant socio-economic impact. 
 
¶5.  Ms. Fowles and Mr. Welty also met with the Second Vice President 
of Burundi, Mr. Gabriel Ntisezerana, and his staff to discuss the 
details  of the MOU that outlines the terms of an ADF and Government 
of Burundi partnership.  Members of the Second Vice President's 
staff stressed that they are committed to the ADF proposal, but 
added that as yet Burundi's legal experts have not fully vetted the 
document. Thus, the GOB  could not discuss the proposed MOU 
substantively.  ADF also participated in the US delegation to the 
GOB's Roundtable for International Donors (reftel). 
 
¶6.  ADF also identified possible future points of contacts to 
represent them in advance of establishing a permanent presence in 
Burundi.  Ms. Fowles asked several NGOs to expand on their 
experiences in hiring local staff, the challenges of obtaining an 
office, and security concerns for a locally-staffed ADF office and 
its employees. 
 
MOLLER