Press Release No. 09/205

Press Release: Statement at the Conclusion of an IMF Mission to Burundi

June 10, 2008

A mission from the International Monetary Fund (IMF), led by Mr. Bernardin Akitoby, visited Burundi May 27–June 10, 2009 to conduct the second review of the government economic and financial program supported by an arrangement under the Poverty Reduction and Growth Facility (PRGF) and to assess the impact of the global financial crisis on Burundi.

The mission met with President Pierre Nkurunziza; the First Vice-President, Yves Sahinguvu, the Second Vice-President, Gabriel Ntisezerana; the Minister of Finance, Clotilde Nizigama; the Ministers responsible for Education, Health, Agriculture; Regional Integration, and the Fight against AIDS; and the Governor of the Central Bank, Gaspard Sindayigaya. The mission had constructive discussions with members of the donor community, the private sector and civil society.

Mr. Bernardin Akitoby, Mission Chief for Burundi, issued the following statement in Bujumbura today:

“Real Gross Domestic Product (GDP) increased by 4½ percent in 2008, up from 3.6 percent in 2007, mainly because of a good coffee harvest and higher donor support to address the impact of high food and fuel prices. With international commodity prices higher in the first seven months of the year, year-on-year inflation reached about 26 percent by year-end, well above the 14 percent program target.

“Economic growth is projected to moderate to 3.2 percent in 2009, mainly reflecting: (i) reduced demand for exports; (ii) a decline in world coffee prices; (iii) uncertainty over trade finance for the coffee sector; (iv) lower remittances; and (v) reduced foreign direct investment. Because international oil and food prices have been falling, headline inflation is projected to decline to 9 percent in 2009. The external current account deficit is expected to improve as the effect of lower oil and food prices on imports outweighs the negative impact of lower coffee prices on exports —coffee still accounts for some 70 percent of Burundi’s exports.

“Performance under the PRGF-supported program has been broadly satisfactory. All quantitative and structural performance criteria for March 2009 were met, and structural reforms were moving ahead. The value-added tax (VAT) law was promulgated, the payroll management was transferred to the Ministry of Finance, and the census of government employees was completed. Moreover, the adoption of the public financial management (PFM) strategy has provided the impetus for the PFM reform agenda.

“Policy discussions focused mainly on the revised fiscal program and the need to preserve macroeconomic stability and revive growth in the face of the challenging economic environment. The mission shared the authorities’ concerns about the fallout from the global economic crisis on the Burundian economy. The global economic crisis has already had a negative impact on revenue in the first quarter of 2009, and is likely to lead to a shortfall for the year as a whole. Additional budgetary support from the donor community will help maintain macroeconomic stability and protect priority spending for poverty reduction.

“The mission was encouraged by the authorities’ efforts to consolidate progress on revenue collection and reallocate spending to priority sectors. The mission encouraged the authorities to consolidate progress in governance and deepen structural reforms, including in the coffee sector.

“The mission confirmed that the IMF will continue to help Burundi address these challenges. The IMF Executive Board is expected to consider the staff report on the second review of the PRGF-supported program in July 2009. The mission would like to thank the authorities for their warm hospitality and very close and constructive cooperation.”