Economic Development and Political Uncertainty: A Burundian Case Study

Political uncertainty has had a significant influence on economic activities, and in various contexts. The Republic of Burundi was used as a case study to illustrate the argument. President Nkurunziza’s possible re-election for a third non-constitutional term has sparked massive protests within the country, which had dire consequences for Burundi’s economic performance. This analysis however proves that economic growth and investment started to recover almost immediately after President Nkurunziza was sworn in, and despite on-going conflict between police forces and opposition in the capital. Classical accounts of political instability cannot explain this particular trend, and this is where political uncertainty comes in. GDP growth rates and investment dropped in mid-2015 as market actors could not predict the next course of events. Once it became clear that President Nkurunziza was to stay in power, political uncertainty was considerably reduced and the pace of economic activities started to increase again.