IMF Executive Board Approves US$7.6 Million Debt Relief to the Republic of Burundi Under the Catastrophe Containment and Relief Trust
IMF News, July 20, 2020
Source details
- Canonical URL
- IMF Executive Board Approves US$7.6 Million Debt Relief to the Republic of Burundi Under the Catastrophe Containment and Relief Trust
Other formats
Bibliographic details
- Published: July 20, 2020
Approval and quantum of relief
- The Executive Board approved a grant under the IMF’s Catastrophe Containment and Relief Trust (CCRT) to cover Burundi’s debt service falling due to the IMF from July 21, 2020 to October 13, 2020, the equivalent of US$ 7.63 million (SDR 5.48).
- Additional relief covering the period from October 14, 2020 to April 13, 2022 will be granted subject to the availability of resources in the CCRT, potentially bringing total relief on debt service to the equivalent of US$24.97 million (SDR 17.96).
- The Executive Board approved debt relief under the CCRT to provide US$ 7.63 million (SDR 5.48 million) over the next 3 months, and potentially up to US$ 24.97 million (SDR 17.96 million) over the next 21 months.
Purpose and intended use of the relief
- The debt service relief will help free up resources for public sector health needs including other emergency spending.
- The relief is intended to help mitigate the balance of payments shock resulting from the COVID-19 pandemic.
- The authorities have committed to use the additional resources to address the COVID pandemic in a transparent manner and have committed to undertake and publish an ex-post audit of COVID-related spending.
- It will be important to reprioritize fiscal spending for health and other priority social spending as needed.
Economic impact and projections
- Economic growth projections for 2020 have been revised down by 5.3 percentage points to -3.2 percent in 2020.
- The pandemic has exacerbated preexisting economic challenges and creates significant external financing needs in 2020 and 2021, mainly as a result of lower exports, elevated imports needs, and reduced remittances inflows.
- The pandemic has also created sizable fiscal financing needs, which will have to be met mainly from external sources.
Policy guidance and recommended actions
- Ensure close cooperation with multilateral organizations and donors.
- Ensure adequate budget allocations toward health and other priority spending.
- Reprioritize fiscal spending for health and other priority social spending as needed.
- Resume Article IV consultations with the Fund.
- Further improvement of data provision and coverage will be key for policy development and engaging with multilateral agencies and donors.
IMF statement highlights (Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair)
- “The COVID-19 pandemic is having an adverse economic impact on Burundi, creating exceptional fiscal and balance of payments needs. The economy has slowed sharply.”
- “The authorities have implemented containment measures consistent with their pandemic response plan that focuses on strengthening the health care system, the social safety net, and parts of the road network to facilitate access to sick people.”
- “The IMF’s debt service relief under the Catastrophe Containment and Relief Trust will free up public resources to help address the pandemic.”
- “The authorities are committed to using the additional resources to address the COVID pandemic in a transparent manner and have committed to undertake and publish an ex-post audit of COVID-related spending.”
- “Looking ahead, it will be important to resume Article IV consultations with the Fund. Further improvement of data provision and coverage will be key for policy development and engaging with multilateral agencies and donors.’’
Press Release No. 20/265 — July 20, 2020. IMF Communications Department; PRESS OFFICER: Meera Louis; Phone: +1 202 623-7100; Email: MEDIA@IMF.org; @IMFSpokesperson
References
- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg
- The Executive Board
- Burundi and the IMF
- Special Drawing Rights (SDRs) -- A Factsheet
- Press Releases
- PRESS CENTER
- https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker
- https://www.imf.org/external/NP/SEC/bc/eng/index.aspx
- https://www.imf.org/en/home
