Statement at the Conclusion of an IMF Staff Mission to BurundiPress Release No. 10/226
June 4, 2010
A mission from the International Monetary Fund (IMF), led by Mr. Bernardin Akitoby, visited Burundi May 11-22, 2010 to conduct the 2010 Article IV Consultation1 and the fourth review of the government’s economic and financial program supported by the IMF under the Extended Credit Facility (ECF).
The mission met with President Pierre Nkurunziza; the First Vice-President, Dr. Yves Sahinguvu; the Second Vice-President, Gabriel Ntisezerana; the Minister of Finance, Clotilde Nizigama; and other key Ministers; as well as the Governor of the Central Bank, Mr. Gaspard Sindayigaya. The mission had constructive discussions with members of the donor community and civil society.
Mr Akitoby issued the following statement in Bujumbura on May 31, 2010:
“Performance under the ECF-supported program has been broadly satisfactory. All quantitative performance criteria and structural benchmarks for March 2010 were observed. Structural reforms are on track. Notably, the authorities introduced the new chart of accounts with the 2010 budget. They also drafted regulations, in accordance with the new budget law, that govern budget execution and redefine the role of the central bank in public financial management.
“The economy is expected to gradually recover from the global financial crisis, although near-term risks remain. Real gross domestic product (GDP) growth is projected to rise to 3.9 percent in 2010, from 3.5 percent in 2009, mainly because of a substantial increase in coffee production and donor-financed investment. Headline inflation is projected to increase to 9.5 percent because of higher food and oil prices. Gross official reserves are forecast to decline to six months of imports, reflecting use of foreign exchange sales for central bank sterilization operations. In the near term, downside risks include mainly the uncertain external environment and the electoral cycle covering four months.
“For 2010, program discussions focused mainly on the need to revise the program to take into account the issuance of domestic bonds to clear over 2010–11 the liability stemming from retroactive implementation of the civil servant statutes; drought-related emergency spending; and the government’s contribution to the cost of the 2010 general elections. The mission also urged the authorities to accelerate the establishment of the Burundi Revenue Authority in order to safeguard revenue collection.
“Against the background of the East African Community (EAC) integration, the Article IV consultation discussions focused on two key themes: accelerating growth and reducing poverty, and achieving progress toward Millennium Development Goals while safeguarding fiscal sustainability. The mission stressed the need to pursue appropriate growth-enhancing reforms by refocusing capital spending on key infrastructure, accelerating EAC integration, and advancing financial sector reform. Achieving debt sustainability should anchor medium-term fiscal policy. Given Burundi’s debt burden, external financing of the budget should be limited to grants and highly concessional loans. The mission also encouraged the authorities to continue reforms of wage and employment.
“The mission confirmed that the IMF will continue to help Burundi to address these challenges. The IMF Board is expected to consider the staff report on the 2010 Article IV consultation and the fourth review of the ECF-supported program in July 2010. We would like to thank the authorities for their warm hospitality and the very close and constructive cooperation.”
1 Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.