IMF Concludes Second ECF Review Mission to BurundiPress Release No. 12/487
December 14, 2012
A mission from the International Monetary Fund (IMF), led by Mr. Oral Williams, visited Bujumbura from December 3–14, 2012 to conduct the second review of the government’s economic and financial program supported by the IMF under the Extended Credit Facility (ECF). The mission met with the President of the Senate, Gabriel Ntsizerana, the Minister of Finance, Tabu Manirakiza; the Governor of the Central Bank, Jean Ciza, and other high level government officials. The mission had constructive discussions with members of the donor community, the private sector, and civil society.
At the end of the mission, Mr. Williams, IMF Mission Chief for Burundi issued the following statement:
“Performance under the ECF-supported program has been broadly satisfactory, despite very difficult circumstances. All quantitative performance criteria for September 2012 were observed, and structural reforms are on track. Notably, some progress has been made toward controlling discretionary exemptions, the reorganization of the Ministry of Finance, and the adoption of a decree on budget governance.
“The economy was negatively affected by the food and fuel shocks and lower-than-expected aid inflows, resulting in a downward revision in economic growth to about 4 percent in 2012. Tighter liquidity conditions and the temporary removal of taxes on food products contributed to a sharp deceleration in headline inflation (year-on-year), which declined from a peak of about 25 percent in March to 11.7 percent at end-November. Looking ahead to 2013, the economy will be subject to continued risks associated with an uncertain external environment and the unpredictability of donor inflows. Economic growth is expected to rise to 4.5 percent and inflation to decline further to about 9 percent owing to lower international food and fuel prices.
“The mission reached understandings ad referendum with the authorities on key policy issues. Discussions focused mainly on the 2013 budget and the policy mix required to bring inflation down to single digits. The mission emphasized the need to exercise greater control over spending commitments in line with available financing to avoid the accumulation of arrears. The mission also encouraged ongoing efforts in revenue mobilization to cover a greater share of current spending in the face of uncertainty in aid inflows and to reduce financing pressures on the domestic market. The implementation of the public financial management strategy is key to consolidating reforms aimed at improving transparency and accountability. 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 in the wake of the recent donors conference.
“The mission confirmed that the IMF will continue to work with Burundi to address these challenges with the aim of allowing the IMF’s Executive Board to consider the second review of the ECF in February 2012. The IMF team wishes to thank the authorities for their warm hospitality and for the constructive and open dialogue on policy issues.”