October 5, 2023
PRESS OFFICER: Eva Graf
Phone: +1 202 623-7100Email: MEDIA@IMF.org
Bujumbura: An International Monetary Fund (IMF) team led by Ms. Mame Astou Diouf, Mission Chief for Burundi visited Bujumbura during September 25−29, 2023 and held follow-up discussions during October 2−4 with the Burundian authorities on recent developments and progress towards the objectives of the new arrangement under the Extended Credit Facility (ECF). At the end of the visit, Ms. Diouf issued the following statement:
“On July 17, 2023, the Executive Board of the International Monetary Fund (IMF) approved a 38-month arrangement under the Extended Credit Facility (ECF) with access of SDR 200.2 million (or about US$ 261.7 million, representing 130 percent of quota).
“Discussions held during the mission covered recent macroeconomic and policy developments, progress towards reform implementation under the ECF-supported program, and near-term macroeconomic prospects and policy plans.
“Economic growth is expected to slightly accelerate in 2023 (from 1.8 percent in 2022), driven by the secondary and tertiary sectors, as the Burundian economy continues to recover. However, shocks slowed down the recovery. Notably, rain delays and structural challenges at the end of 2022 impacted the first agricultural season of 2023. Commerce and in-country distribution of agricultural products were disrupted by domestic fuel shortages as limited foreign exchange (FX) availability compounded high fuel import prices and supply chain issues. Increases of pump prices in July and September and fuel import volume helped reach cost-recovery pricing and tame shortages. Inflation pressures have continued with average inflation standing at around 29 percent during January−August 2023, driven mainly by food prices, despite easing somewhat during March−July. The beneficial effects of the new agricultural harvest on food prices were outweighed by high import prices owing to the war in Ukraine and domestic factors.
“External sustainability remains a pressing challenge. The current account deficit is projected to remain large (15.6 percent of GDP in 2022).Foreign currency reserves have continued to decline, reaching US$ 59.7 million (about 0.5 month of imports) in mid-September (from 1.3 months of imports at end-March 2023), driven by the import bill and delayed gold sales. Strong remittance inflows and the IMF’s first ECF disbursement have provided a cushion.
“The 38-percent nominal ER depreciation operated by the central bank on May 4, 2023 temporarily reduced the parallel ER market premium . However, from about 42 percent on May 4, the parallel ER market premium has widened since (about 57.4 percent in end-September). The financial sector shows resilience.
“With the support of the new ECF arrangement, the Burundian authorities have committed to a broad-based macroeconomic reform agenda aimed at tackling key challenges.
“The IMF remains committed to supporting the efforts of the Burundian authorities to reduce external imbalances, rein in inflation, preserve debt sustainability, and foster governance and sustainable and inclusive growth.
“The mission met with H.E. Prime Minister Gervais Ndirakobuca; H.E. Audace Niyonzima, Minister of Finance, Budget and Economic Planning (MFBPE); Mr. Dieudonné Murengerantwari, Governor of the Bank of the Republic of Burundi (BRB); Ms. Francine Inarukundo, Permanent Secretary of the MFBPE. The mission also met with other officials of the government and the BRB, as well as representatives of commercial banks, the private sector, civil society, and donors.
“The mission would like to take this opportunity to warmly thank the Burundian authorities for their hospitality and cooperation, and open and productive discussions.”
