## Burundi: Request for a 38-Month Arrangement under the Extended Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for Burundi

_IMF Staff Country Reports, July 25, 2023_

## Source details

**Canonical URL:** [Burundi: Request for a 38-Month Arrangement under the Extended Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for Burundi](https://www.imf.org/en/publications/cr/issues/2023/07/21/burundi-request-for-a-38-month-arrangement-under-the-extended-credit-facility-press-release-536810)

## Other formats

- [Markdown version](/en/publications/cr/issues/2023/07/21/burundi-request-for-a-38-month-arrangement-under-the-extended-credit-facility-press-release-536810/index.md)
- [Structured JSON version](/en/publications/cr/issues/2023/07/21/burundi-request-for-a-38-month-arrangement-under-the-extended-credit-facility-press-release-536810/index.json)
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## Bibliographic details
- Published: July 25, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400249358.002

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### Overview and context
- Paper highlights Burundi’s Request for a 38-month arrangement under the Extended Credit Facility (ECF).
- Key macroeconomic pressures:
  - Protracted balance of payments needs with a widening current account deficit and low foreign reserves coverage.
  - Large development needs.
  - Macroeconomic challenges triggered by spillovers from the war in Ukraine and domestic climate shocks and livestock sanitary crisis.
- Purpose of the 38-month ECF arrangement:
  - Cushion Burundi’s adjustment.
  - Support the authorities’ reform agenda aimed at reducing debt vulnerabilities, recalibrating exchange rate and monetary policies to restore external sustainability, and strengthening inclusive economic growth and governance.

### Major challenges identified
- Balance of payments stress:
  - Widening current account deficit.
  - Low foreign reserves coverage.
- Exogenous and domestic shocks:
  - Spillovers from the war in Ukraine.
  - Domestic climate shocks.
  - Livestock sanitary crisis.
- Development and fiscal pressures:
  - Large development needs compounded by macroeconomic vulnerabilities.

### Policy measures and reform agenda under the ECF
- Macroeconomic policy recalibration:
  - Recalibrate Burundi’s macroeconomic policy mix.
  - Restore external sustainability through unification of the official and parallel exchange rate markets and foreign exchange market liberalization, while being attuned to financial sector vulnerabilities.
- Fiscal and debt strategy:
  - Strengthen debt sustainability.
  - Achieve a better-quality fiscal consolidation path through:
    - Higher domestic revenue mobilization.
    - Scaled-up investment and better-targeted spending.
    - Prudent borrowing.
- Monetary and exchange rate policy:
  - Exchange rate market unification and liberalization consistent with attention to financial sector vulnerabilities.

### Expected outcomes and objectives
- Restore external sustainability.
- Reduce debt vulnerabilities.
- Strengthen inclusive economic growth and governance.
- Improve quality of fiscal consolidation via revenue mobilization, investment scaling, and targeted spending.

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## Content in this bundle

- **1bdiea2023001**
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_Source: https://www.imf.org/en/publications/cr/issues/2023/07/21/burundi-request-for-a-38-month-arrangement-under-the-extended-credit-facility-press-release-536810_