Statement by an IMF Mission to BurundiPress Release No. 10/501
December 17, 2010
A mission from the International Monetary Fund (IMF), led by Mr. Bernardin Akitoby, visited Bujumbura from December 1–10, 2010 to conduct the fifth 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, Térence Sinunguruza; the Second Vice-President, Gervais Rufyikiri; the Minister of Finance, Clotilde Nizigama; the Minister of Planning, Pierre Mupila; the Minister in Charge of Good Governance and Privatization, Jean Baptiste Gahimbare; and the Governor of the Central Bank, Gaspard Sindayigaya. The mission had constructive discussions with members of the donor community, the private sector, and the civil society.
At the end of the mission, Mr Akitoby, IMF Mission Chief for Burundi issued the following statement:
“Performance under the ECF-supported program has been broadly satisfactory, despite risks posed by the recent electoral cycle. All quantitative performance criteria for September 2010 were observed, and structural reforms are on track. Notably, progress has been made toward the implementation of a single treasury account and staffing of the Burundi Revenue Authority is nearly complete.
“The economy is emerging slowly from the effects of the global crisis. Economic growth is expected to rise to 3.9 percent in 2010, from 3.5 percent in 2009. Because of rising food prices, headline inflation (end of period) is likely to increase to 7.5 percent in 2010, compared with 4.6 percent in 2009. The macroeconomic outlook in 2011 is generally positive with real GDP projected to rise by 4.5 percent and inflation forecast at about 8 percent. The foremost downside risk stems from the uncertain external environment.
“For 2011, policy discussions focused mainly on the 2011 budget and the need to preserve macroeconomic stability and revive growth in the face of the challenging economic environment. The mission stressed the need to pursue appropriate growth-enhancing reforms by refocusing capital spending on key infrastructure, accelerating integration within the East African Community (EAC), 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. Acknowledging the need for more spending in the priority sectors, the program incorporates a contingency plan to increase spending if additional concessional financing becomes available or revenue collections are higher than programmed.
“The mission was encouraged by the authorities’ efforts to consolidate progress on revenue collections and reallocate spending to priority sectors. It encouraged the authorities to continue reforms of wage and employment. The mission welcomed the government’s stated policy of zero tolerance for corruption. It encouraged the authorities to consolidate progress in good governance and deepen structural reforms, including in the coffee sector.
“The mission confirmed that the IMF will continue to work with Burundi to address these challenges. The discussions are expected to be concluded in the coming weeks, which would lay the basis for completion of the fifth review of the ECF by the IMF’s Executive Board in February 2011. The mission would like to thank the authorities for their warm hospitality and very close and constructive cooperation.”