Burundi is one of the smallest and least-covered markets in the East African Community, yet it supports genuine businesses in agribusiness, coffee and tea, trading, construction, hospitality and financial services. When founders there struggle to raise capital or sell, the obstacle is rarely the business model. It is risk perception — and currency risk sits at the top of the list.
This article explains the mechanism by which that perception becomes a number in an offer letter, why local and foreign valuations of the same company diverge so sharply, and what actually moves the gap.
How the discount is constructed
An investor funding in dollars must convert into Burundian francs to invest, then convert profits or sale proceeds back out. Every franc of future cash flow is therefore discounted for:
Expected depreciation of the franc against the dollar over the holding period
Difficulty converting and repatriating funds when foreign exchange is scarce
Political and regulatory uncertainty
Limited market information and almost no comparable transactions to benchmark against
That last factor compounds the others. In a market with no observable deal data, an investor cannot calibrate their assumptions against anyone else's. They are obliged to be conservative, because being wrong has no comparator to blame.
The discount appears in four places, not one: a lower valuation multiple, a higher required rate of return, a smaller proportion of the price paid at completion, and a preference for structures that shift risk back onto the seller. A founder focused only on the multiple will negotiate the least important of the four.
Why local and foreign valuations diverge
A Bujumbura company earns BIF 1.5 billion of annual profit. A local investor, who will hold and spend in francs, values it at five times profit. The currency assumption is irrelevant to them — their liabilities are in the same currency as their returns.
A foreign investor must earn a dollar return. Adjusting for expected depreciation and repatriation friction, they might offer the dollar equivalent of three times profit. Neither party is being unreasonable. They are solving different problems with the same numbers.
Now change one fact. Suppose the same company earns 40% of its revenue in dollars from coffee exports and contracts with international organisations, holds two years of audited accounts, and can show that its margins held steady through a period when the franc weakened.
The foreign investor's risk assessment changes materially, because two of their four concerns have been partially answered with evidence rather than assertion. The gap between the local and foreign numbers narrows — not to zero, but enough to make a transaction possible where it previously was not. The figures are illustrative; the logic is exactly how cross-border investors reason.
Transparency as a pricing instrument
In a low-information market, verifiable information is scarce, and scarcity is priced. This is the central and slightly counter-intuitive point about Burundian valuations: the things that narrow the discount cost relatively little, and they work precisely because so few competitors bother.
What investors look for:
A clear shareholder register and constitution
Written agreements between partners rather than understandings
Board meetings with minutes, even where the board is three people
Monthly management accounts that reconcile to bank statements
A named finance lead accountable for reporting and tax compliance
Current filings with the Office Burundais des Recettes
None of this changes what the business earns. All of it changes what an investor believes about what the business earns, and belief is what gets multiplied.
The dual-currency question
Presenting results only in francs is the most common unforced error in Burundian fundraising. Local-currency growth can look impressive while real, hard-currency value has been flat or declining — and the investor will perform that conversion themselves, arriving at a less flattering version than the founder would have presented.
The deeper question behind the arithmetic is pricing power: when the franc weakened, did the business pass costs through to customers, or absorb them? A company that can demonstrate the former has an argument that its earnings are real in dollar terms, which is the single strongest valuation argument available in an inflationary environment. A company that cannot is, from the investor's perspective, a franc-denominated asset wearing a business-shaped disguise.
Structures that bridge the gap
Where the valuation gap cannot be closed on price, it is often bridged on structure:
Staged payments, with part of the consideration paid later as performance is demonstrated
USD-linked earn-outs, so the founder shares in the upside if hard-currency performance proves stronger than the investor's assumption
Minority investment with a defined path to majority, letting the investor test the business before full commitment
Shareholder loans alongside equity, with explicit repayment terms, which can make repatriation more predictable than dividends
Holding structures in a regional jurisdiction, subject to proper tax and legal advice in every country involved
Each of these transfers risk between the parties in a different direction, and each has a cost the founder may not price correctly without help. A USD-linked earn-out, for instance, can be either the founder's best protection or their worst exposure depending entirely on how the exchange rate reference is defined.
Who the likely buyers are
Regional investors concentrate on sectors where Burundi has either hard-currency revenue or infrastructure-linked demand: agribusiness and exports, especially coffee, tea and horticulture; financial services including microfinance and payments; construction and building materials; hospitality and services supporting organisations based in Bujumbura and Gitega; and trade and distribution as EAC integration improves cross-border flows.
Banks such as KCB Burundi, CRDB Burundi and DTB Burundi already operate locally, as do multinationals such as Heineken's Brarudi. Suppliers, partners and customers already inside the EAC are usually the most natural acquirers — they have already solved the country-risk question for themselves.
The questions that decide your number
What proportion of your revenue is genuinely in hard currency, and could you evidence it?
When the franc last weakened sharply, what happened to your margins — and do your records show it?
What currency assumption is a prospective investor applying to your cash flows, and have you ever asked them?
Would your shareholder register and partner agreements survive a lawyer's review today?
Which of the structural bridges — staged payments, earn-outs, staged majority — fits your situation, and what does each cost you?
Is a regional strategic buyer who already operates in Burundi a more realistic counterparty than a financial investor?
Where founders need guidance
You cannot control the exchange rate. You can control how clearly your business demonstrates real value, and which investor you are having the conversation with — and those two choices determine most of the outcome.
Acquihub works with founders across East Africa on valuation, on presenting businesses credibly to regional and international investors, and on negotiating structures that do not quietly transfer all the currency risk back to the seller. If you are raising capital or exploring a sale in Burundi, talk to us.
Frequently asked questions
Why do foreign investors value Burundian businesses lower than local investors? Because they must earn a return in hard currency. Future franc cash flows are discounted for expected depreciation, repatriation difficulty, political and regulatory uncertainty, and the absence of comparable transactions to benchmark against.
Does hard-currency revenue increase a Burundian company's valuation? It generally does, because it removes part of the currency risk from the investor's model. Export earnings, contracts with international organisations, and services billed to regional clients all contribute.
Should I present my accounts in BIF or USD? Both. Investors will convert your results to dollars regardless; providing the conversion yourself, at actual historic rates, lets you control the narrative and demonstrate how real value behaved over time.
What deal structures are used where currency risk is high? Staged payments, USD-linked earn-outs, minority investments with a path to majority, shareholder loans alongside equity, and regional holding structures. Each allocates risk differently and should be modelled before it is agreed.
Which sectors in Burundi attract regional investors? Agribusiness and exports — particularly coffee, tea and horticulture — alongside financial services, construction and building materials, hospitality, and trade and distribution.