After a devastating market fire, Burundi's economy hobbles forward

A week ago, the capital's Central Market burned to the ground. Now the tiny East African nation is struggling with rapid inflation and price hikes as rumors circle about the cause of the fire. 

Melanie Stetson Freeman/The Christian Science Monitor
In this 2006 file photo taken in the central downtown market of Bujumbura, Burundi, a man examines rice for sale. Different sections of the market carry a wide variety of items.

A version of this post originally appeared on the blog, "Manila2Vanilla." The views expressed are the author's own.

On the morning of Sunday, Jan. 27, smoke filled the otherwise clear sky in Burundi's capital Bujumbura as its Central Market burned to the ground.

The market was the epicenter of the nation’s economy, providing goods to the entire country, as well as the neighboring Congo and Rwanda. Food products, manufactured goods, beverages, clothing, construction materials, and equipment sold at the market generated about $4 million per day.

For the past week, all of that activity has been at a standstill. 

Burundi doesn’t often make an appearance on the world stage. Nestled in East Africa between the Democratic Republic of the Congo (DRC) and Tanzania, it’s one of the smallest countries on the continent, about the size of Maryland. It is also one of the poorest. The average Burundian makes about $600 a year. Decades of ethnic conflict between the majority Hutu and minority Tutsi have set back the economy considerably.

While its 10.5 million people have enjoyed peace and steady economic growth in the past few years, signs abound that the fire has weakened the country’s already fragile economy.

Though the fire was spotted at 6:30 a.m., the fire department didn’t arrive until one hour later, at which point they passively watched the blaze mount up to 65 feet tall, while attempting to retrieve non-existent water from their pumps. The fire started to diminish at 1 p.m. when neighboring Rwanda sent helicopters in with buckets of water.

But by then it was too late. The market was already demolished, along with millions of dollars worth of merchandise and local currency.

Of the 5,000 merchants employed by the Central Market, only 10% had their products insured. Taxation up of to 53 percent on high-volume bank accounts meant that many merchants stored life savings in cash at their market stalls. Most of that money has been burnt to ash.

Alongside dozens of other merchants, one woman ran into the fire with her baby strapped to her back in an attempt to retrieve 500 million Burundian Francs ($312,000) she had kept in her stand. She and her baby died in the blaze.

Burundi’s inflation, normally 11.8%, is expected to skyrocket further. Banks and exchange companies are reluctant to part with United States dollars, a currency heavily relied on for its stability and necessary to conduct business with Congo.

Signs indicate that Burundi’s currency is already headed towards a crash. The day before the Central Market fire, the exchange rate was 1515 BIF to 1 USD. Today the rate is 1572 BIF.

Further exacerbating inflation is the limited availability of goods. It’s becoming increasingly difficult to acquire food products and manufactured goods. Prices have soared since the fire. Before the fire, for example, a pair of mangoes was 1,000 BIF. One week after the fire, the price was 4,000 BIF.

The country-wide transportation system has also been affected. The main station with bus lines running throughout the country and neighboring countries was previously located at the market. It has now been relocated at the edge of town, making it difficult to access and causing a decline in the number of passengers. Trips throughout the country and the region have decreased, inevitably leading to a decrease in transport of goods and trading revenue.

All of these factors will devastate Burundi’s nascent economy.

“What we have now is a lot of desperate people, willing to do desperate things,” says a facilities manager based in Bujumbura who asked that his name not be used.

In a country familiar with violence, corruption, and stifling political dialogue, distrust runs high and rumors abound as to the cause of the fire, now widely believed to be arson.

Bujumbura’s Central Market fire was just one of many fires which have demolished Burundi’s markets in recent years. In January 2012, Kamenge Market in northern Bujumbura caught fire. In 2011, Kayogoro Market and Nyanza-Lac Market in the southern Makamba Province, as well as Bururi Market in Bururi Province all witnessed fires. And in December 2010, Mutaho Market in the central Gitega Province was destroyed by a fire.

Though market fires are common in Burundi, people are struggling to understand the motivations behind the Central Market fire.

“Whatever someone was hoping to gain by this was just plain stupid because the economic repercussions are immense,” says the facilities manager.

Like many Burundians, he hopes the country will bounce back from the fire, rather than fall into the kind of chaos the country has seen during less peaceful times.

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