The Board of the International Monetary Fund (IMF) on Friday approved an amount equivalent to Special Drawing Rights (SDR) of five million (about US$7.5 million) for Burundi.
An IMF statement, made available to PANA in New York, said that the Board’s decision was based on the completion of the third review of Burundi’s performance under a programme supported by the Extended Credit Facility (ECF) arrangement.
The IMF said that approval brought the total disbursements under the arrangement to SDR 15 million (about US$22.6 million).
“In completing the review, the Board also approved a request for a modification of performance criteria for end-September and end-December 2013, and the continuous
performance criterion on non-concessional external debt contracted or guaranteed by the government or the Bank of the Republic of Burundi,” it stated.
It recalled that Burundi’s three-year ECF arrangement was approved on 27 January, 2012, with total access equivalent to SDR 30 million (about US$45.3 million).
Ms. Naoyuki Shinohara, IMF’s Deputy Managing Director and Acting Board’s Chair, said: “Burundi has made progress under the ECF-supported programme amidst challenging socio-political and economic circumstances.”
She said economic growth was expected to pick up, while inflation had been declining aided by moderating international food and fuel prices and tight monetary policy.
“The medium-term economic outlook remains difficult, with downside risks arising from uncertainties in the external environment, and the influx of refugees stemming from the conflict in Eastern Congo,” he stated.
He, however, said that strong commitment to programme policies and structural reforms remained critical going forward.
Ms. Shinohara also said: “Revenue slippages that emerged were addressed through corrective measures which formed the basis for a revised budget that was adopted by parliament.”
“A recommitment to revenue mobilization notably by further strengthening tax administration and containing exemptions is critical to the success of the programme. Efforts are also needed to enhance public financial management reforms,” the IMF official stressed.
She noted that debt sustainability remained the anchor for medium-term fiscal policy, adding that Burundi continued to be at high risk of debt distress, and it would be important that any future borrowing relied mainly on grants and highly concessional loans.
“The ongoing finalization of a debt law governing the contraction of debt constitutes an important step towards strengthening the public debt management framework,” she said.