Burundi’s central bank has signed a deal with Russia’s Gazprom bank to facilitate foreign investment in the African nation, which has been embroiled in a political crisis for more than a year and faced Western aid cuts.
The Central Bank of Burundi, known by the French acronym BRB, signed the deal on Thursday with Russia’s Gazprombank “to facilitate foreign direct investment in Burundi”, Burundi’s Second Vice President Joseph Butore tweeted.
The agreement “is a guarantee for Russian companies which are interested in the EAC through Burundi,” Butore wrote, referring to the East African Community (EAC) trade bloc that groups Burundi, Rwanda, Kenya, Tanzania, Uganda and South Sudan.
The deal was signed on the sidelines of the St Petersburg International Economic Forum.
“Burundi wants to establish trade relations with Russia and for this it needs a correspondent account to pay in local currency,” a Gazprombank source said. But the source added that there were currently no major projects between the two countries.
No further details were immediately available on the deal but other African nations, including Mozambique, have turned to Russian institutions when Western donors or multilateral bodies have been more reluctant to provide funding.
Burundi boasts few major foreign investments beyond its mobile phone businesses and main brewery Barudi, owned by Heineken. The crisis has hammered an already struggling economy and caused a shortage of foreign exchange.
Burundi has been mired in crisis since President Pierre Nkurunziza pursued and won a third term in office last year. His opponents and Western nations say this violates the constitution and a deal that ended a civil war in 2005. Officials dismiss this and cite a court decision that ruled he could run again.
The United States and Europe, the biggest donors to Burundi, have cut back on their support and imposed sanctions on some senior officials and rebels, as violence has flared. More than 450 people have been killed and rebel groups have emerged.
Russia has typically taken a more cautious line at the U.N. Security Council when Western states have called for outside intervention to end the violence.