A Cabinet Meeting was held on Tuesday 27 March 2018 under the chairmanship of His Excellency Pierre Nkurunziza, President of the Republic of Burundi.
This was the first Cabinet Meeting following the Government’s swearing-in after the reshuffle of 19 April 2018.
The session began with a prayer by the Head of State himself who informed the new members of the Government that it is a tradition to entrust to the almighty God, activities of such a great importance.
His Excellency the President of the Republic then congratulated the members of the new Government for the trust placed in them. They were chosen from the millions of other Burundians thanks to the will of Almighty God. The Head of State took the opportunity to provide them with advice that will help them in the responsibilities entrusted to them.
He discussed the challenges faced by the outgoing team especially during the highlights of the 2015 crisis, where only the courage and determination of the members of the Government helped to overcome the crisis. His Excellency the President of the Republic invited members of the Government reappointed in the new team to nurture the new comers in the spirit of solidarity particularly with regard to the various recommendations and resolutions taken during the governmental retreats and in council of Ministers, while recalling the principle of collegiality that should guide the government team.
President Nkurunziza invited the new members to follow the directives already established in the Council of Ministers or during the governmental retreat, especially in relation to the ethic, to show a lot of spirit of discernment before making any decision and especially the good decision, as well as field visits to meet people to listen to them, learn about their aspirations and needs in order to follow up on issues that fall within their purview or bring to the attention of the relevant authority any issue they may find complex. He insisted indeed that the people of Burundi have their eyes on them and that they do not have the right to disappoint them, meaning that heavy responsibilities weigh on their shoulders.
The Head of State also urged the members of the Government to serve as a role model in developing the country inasmuch as they are leaders at the top level. In order to take off in terms of development, Burundi needs such a philosophy vis-à-vis of the members of the Government. It is also necessary to serve as an example by initiating individual development projects.
Finally, His Excellency the President of the Republic reminded the members of the Government that in the framework of their responsibilities, the protocol standards governing international diplomacy in matters of relations with accredited diplomatic missions in Bujumbura must be observed. Indeed, the protocol rules require that invitations addressed to members of the Government to participate in activities and other ceremonies organized by diplomatic missions must go through the Ministry of External Relations which assesses the level of representation required. The presence of a member of the Government at these ceremonies outside this channel is therefore inappropriate.
The members of the Government took good note of the wise advice and recommendations made, and promised to do everything possible not to disappoint but prove worthy of the confidence placed in them.
The analysis of the following items subsequently followed :
1. Draft Law Governing Capital Markets in Burundi, presented by the Minister of Finance, Budget and Economic Development Cooperation.
The Treaty establishing the East African Community states in its provisions that the creation of a regional capital market will take the path of harmonization of the operating rules of the national markets and will be based on the existence of stock market in each member state. Burundi is the only country of the Community that does not have a stock market until Today. Through its poverty reduction policy, and aware of imperfections in the financing of economic activities, Burundi has developed a national strategy to enhance the financial sector during the period 2011-2017, one of the flagship reforms is the creation of capital markets to meet a desperate need for long-term resources that can be used to finance investment and growth.
Despite this, Burundian financial activity is generally reduced in volume and presents a degree of diversification that is not well developed. It includes commercial banks, micro finance institutions, financial institutions, insurance companies and pension funds. The capital market which is defined as the intersection between capital providers and capital seekers or medium and long-term investments and medium and long-term borrowing, is one of the missing components of the Burundian financial sector.
It is in this context that the Government of Burundi, with the support of the East African Community, initiated a financial market development project to follow the lead of the other countries of the East African Community.
This draft text presented to the Council therefore complies with the Treaty Establishing the East African Community and is intended to govern the capital market with a view to protecting all market participants and beneficiaries. It should be noted that the Council of Ministers analyzed this project in January 2018 and returned it to be enriched.
At the end of this second reading, the Council found the project in accordance with its guidelines and adopted it.
2. File relating to the application for tax benefits by MUSUMBA STEEL :
- Draft agreement on the granting of benefits under the Investment Code to MUSUMBA STEEL Company
- Draft decree validating the agreement signed between the Government of Burundi and MUSUMBA STEEL on the granting of the benefits of the Investment Code.
Also presented by the Minister of Finance, Budget and Economic Development Cooperation.
MUSUMBA STEEL is a Burundian company with headquarters in Bujumbura. It has just invested in the metal industry sector with a construction materials manufacturing project and plans to expand its activities by installing a foundry for the manufacture of concrete bars and nails. The project aims at import substitution in the field of building materials, while offering local consumers the same products at competitive prices.
The target market is the Burundian construction and public works sector, but the company also plans to gain competitiveness in order to sell some of its production outside the country, particularly in the countries of the sub-region.
In order to face this challenge of competitiveness, the company asks the support of the government by (1) the exemption of the duties and taxes on the import of capital goods, raw materials and machinery accessories for 10 years (2) the exemption from value added tax on equipment, raw materials and machinery accessories imported or purchased locally for a period of 10 years ; (3) the exemption from consumption taxes and duties for 10 years, (4) exemption from income taxes for a period of 5 years and (5) the exemption from value added tax on turnover over a period of 5 years.
After discussions, both projects were adopted with some amendments.
3. Draft Ministerial Ordinance setting the Expenditure ceilings for the First Quarter 2018, presented by the Minister of Finance, Budget and Economic Development Cooperation.
The Government of Burundi has embarked on a comprehensive program of Public Finance Management Reforms that derive from the December 2008 Public Finance Act. These reforms mainly concern the preparation and execution of the State Budget, Public Accounting and the control of the use of the State Budget.
As part of the implementation of the Law of December 2008 on the Management of Public Finance, the Budget Act of 2018 provides for the development of ceilings for quarterly disbursement of expenditure that must be validated by the Council of Ministers.
These ceilings of disbursements constitute an indispensable tool for the regulation of Expenditure and contribute to the enhancement of the State’s Cash Flow Plan, which is the main basis for the rational management of the State Treasury. These disbursement ceilings are therefore in line with the State Treasury Plan. They concern all the expenses except those which are compulsory, that is to say the expenditures for wages and the debt.
Therefore, during the 2018 budget management, the rate of expenditure disbursement will depend on the rate of revenue collected by the Bank of the Republic of Burundi.
After analyzing the project, the Council noted that following the recent Government structure in force, an adaptation of the budget to this structure was necessary first. The project will be brought back after the enactment of a decree related to this adaptation.
Under Any Other Business section, the members of the Government exchanged various information pertaining to the national life particularly about the launching of the referendum campaign on May 1st, 2018.
Done at Bujumbura, April 25, 2018
Secretary-General and Spokesman
of the Government.-