- The Executive Board of the International Monetary Fund (IMF) yesterday completed the second review of Burundi’s economic performance under the Poverty Reduction and Growth Facility (PRGF) arrangement and approved the immediate disbursement of an amount of about US$10.2 million) under the programme.
The approval brings to the total disbursements to SDR 19.8 million (about US$30.7 million), the IMF said.
The Burundi arrangement was approved on 7 July 2008 for $71.6 million.
Following the Executive Board's discussion of Burundi’s economic performance, Murilo Portugal, Deputy Managing Director and Acting Chair, said: “The Burundian authorities are to be commended for their strong performance under the PRGF–supported programme in a difficult post conflict environment. In particular, the value-added tax was passed, payroll management transferred to the Ministry of Finance and the census of government employees completed. Monetary and financial sector reforms have also progressed well, and the foreign exchange auction system is being improved,” he said.
Mr Portugal however said the global economic crisis presents the Burundian authorities with macroeconomic challenges, saying that to deal with these challenges, the revised programme for 2009 will provide for near-term fiscal and monetary policy easing, anchored in a prudent medium-term strategy.
“Efforts to enhance revenue mobilisation and to maintain the momentum of public financial management reforms, including the implementation of a single treasury account, will contribute to further strengthening macroeconomic stability. External financing of the budget should continue to be strictly limited to grants and highly concessional loans, given the high risk of debt distress. Monetary policy will aim to reduce inflation to low single digits,” he said.
He continued that efforts to strengthen the financial sector in Burundi will aim at further improving banking supervision, developing a financial sector strategy, and enhancing central bank internal controls and risk management systems, adding that the forthcoming Bank-Fund Financial Sector Assessment Program report will help guide these efforts.
“The achievement of the country’s medium-term objectives of sustained growth and poverty reduction will depend on accelerating structural reforms. Ongoing progress in reforming the coffee sector is welcome, and is key to reducing poverty. Burundi’s East African Community membership will give further impetus to trade, structural reforms, and private sector development,” added Mr Portugal.
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