Press Release: IMF Concludes Staff Visit to Burundi

IMF News, November 22, 2011

Source details

Mission leader: Mr. Oral Williams.
Mission dates: November 8–21, 2011.
Purpose: Conduct the seventh review of the government’s economic and financial program supported by the IMF under the Extended Credit Facility (ECF); review authorities’ fiscal plans for 2012; discuss key elements of a successor ECF arrangement.
Senior officials met: Second Vice-President Gervais Rufyikiri; Minister of Finance Clotilde Nizigama; President of the Senate Gabriel Ntisezerana; Minister in Charge of Good Governance and Privatization Jean Baptiste Gahimbare; Governor of the Central Bank Gaspard Sindayigaya; other senior government officials.
Other consultations: Donor community, private sector, and civil society.

2011 growth: "The economy is expected to grow by about 4.2 percent in 2011, lower than earlier projected, owing to a weakening in aggregate demand related to the food and fuel price shock."
Inflation:
- Headline inflation: "rose sharply to 11.7 percent in September."
- Core inflation: "remained in single digits."
2012 growth projection: "A rebound in coffee production and construction activity should contribute to a moderate pick-up in growth to 4.8 percent in 2012."
Key downside risks: "The uncertainty in the external environment owing to weaker growth in trading partners, lower aid flows, and high oil prices remain key downside risks to the macroeconomic outlook."

Program assessment: "Performance under the ECF-supported program has been satisfactory, despite difficult economic conditions."
Structural reform progress: "There was good progress in the implementation of structural reforms focused on public financial management and the safeguard measures at the central bank and the treasury."
Areas discussed for further reform: Measures to increase revenue mobilization, strengthen public financial management, and improve regulations hampering private sector activity.

Budget support: "In 2012, budget support is expected to decline sharply reflecting uncertainties in the global economy."
Revenue outlook: "While revenue mobilization is likely to strengthen due to ongoing administrative reforms by the Burundi Revenue Authority..."
Expenditure stance: "...expenditures will have to be contained with a view to limiting recourse to domestic financing."

Mission outcome: "The mission reached agreements, ad referendum, on the key elements that would underpin a new ECF arrangement for 2012–14."
Policy emphases of the proposed arrangement:
- Greater exchange rate flexibility.
- Rebuilding of fiscal buffers.
- Safeguarding fiscal sustainability.
- Increasing revenue mobilization.
- Strengthening public financial management.
- Improving regulations hampering private sector activity.
Context: These policies "build on the ex-post assessment of longer term program engagement approved by the Executive Board of the IMF in July 2011."

IMF Executive Board: "The IMF's Executive Board is scheduled to discuss the seventh review of Burundi’s economic program under the ECF and the authorities’ request for a new ECF arrangement for 2012–14 in January 2012."
Closing comment: The mission "would like to thank the authorities for their warm hospitality and very close and constructive cooperation."

Press Release No. 11/429, November 22, 2011.