IMF Completes Second Review under PRGF Arrangement with Burundi and Approves US$10.2 Million DisbursementPress Release No.09/261
July 13, 2009
The Executive Board of the International Monetary Fund (IMF) today completed the second review of Burundi’s economic performance under the Poverty Reduction and Growth Facility (PRGF) arrangement. The completion of the review enables the immediate disbursement of an amount equivalent to SDR 6.6 million (about US$10.2 million), bringing total disbursements to SDR 19.8 million (about US$30.7 million).
The PRGF arrangement was approved on July 7, 2008 (see Press Release No 08/167) for an amount equivalent to SDR 46.2 million (about US$71.6 million).
Following the Executive Board's discussion of Burundi’s economic performance, Mr. Murilo Portugal, Deputy Managing Director and Acting Chair, said:
“The Burundian authorities are to be commended for their strong performance under the PRGF–supported program in a difficult post conflict environment. In particular, the value-added tax was passed, payroll management transferred to the Ministry of Finance and the census of government employees completed. Monetary and financial sector reforms have also progressed well, and the foreign exchange auction system is being improved.
“The global economic crisis presents the Burundian authorities with macroeconomic challenges. To deal with these challenges, the revised program for 2009 provides for near-term fiscal and monetary policy easing, anchored in a prudent medium-term strategy.
“Efforts to enhance revenue mobilization and to maintain the momentum of public financial management reforms, including the implementation of a single treasury account, will contribute to further strengthening macroeconomic stability. External financing of the budget should continue to be strictly limited to grants and highly concessional loans, given the high risk of debt distress. Monetary policy will aim to reduce inflation to low single digits.
“Efforts to strengthen the financial sector will aim at further improving banking supervision, developing a financial sector strategy, and enhancing central bank internal controls and risk management systems. The forthcoming Bank-Fund Financial Sector Assessment Program report will help guide these efforts.
“The achievement of the country’s medium-term objectives of sustained growth and poverty reduction will depend on accelerating structural reforms. Ongoing progress in reforming the coffee sector is welcome, and is key to reducing poverty. Burundi’s East African Community membership will give further impetus to trade, structural reforms, and private sector development,” added Mr. Portugal.