Washington, USA
The Executive Board of the International Monetary Fund (IMF) Monday July 20 approved a grant under the IMF’s Catastrophe Containment and Relief Trust (CCRT) to cover Burundi’s debt service falling due to the IMF from July 21, 2020 to October 13, 2020, the equivalent of US$ 7.63 million (14.68 billion Burundian Franc).
According to the Deputy Managing Director and
Acting Chair of the Executive Board, Mitsuhiro
Furusawa, additional relief covering the period from October 14, 2020 to April
13, 2022 will be granted subject to the availability of resources in the CCRT,
potentially bringing total relief on debt service to the equivalent of US$24.97
million (SDR 17.96).
The debt service relief will help free up
resources for public sector health needs including other emergency spending and
help mitigate the balance of payments shock resulting from the COVID-19
pandemic.
“The COVID-19 pandemic is having an adverse
economic impact on Burundi, creating exceptional fiscal and balance of payments
needs, the economy has slowed sharply.” Said Furusawa adding that the
authorities have implemented containment measures consistent with their
pandemic response plan that focuses on strengthening the health care system,
the social safety net, and parts of the road network to facilitate access to
sick people.
He said that the IMF’s debt service relief under the CCRT will free up public resources to help address the pandemic. The authorities are committed to using the additional resources to address the COVID pandemic in a transparent manner and have committed to undertake and publish an ex-post audit of COVID-related spending.
It will be important to prioritize fiscal spending for health and other priority social spending as needed.
"Looking ahead, it will be important to resume Article IV consultations with the Fund. Further improvement of data provision and coverage will be key for policy development and engaging with multilateral agencies and donors.’’ He stressed.
The pandemic is affecting Burundi through an
evolving domestic outbreak and economic spill overs from the global and
regional environment. Economic growth projections for 2020 have been revised
down by 5.3 percentage points to -3.2 percent in 2020.
The pandemic has exacerbated pre-existing economic
challenges and creates significant external financing needs in 2020 and 2021,
mainly as a result of lower exports, elevated imports needs, and reduced
remittances inflows.
The pandemic has also created sizable fiscal
financing needs, which will have to be met mainly from external sources.
Under new President, Evariste
Ndayishimiye, the Burundian government has launched a three-month
nation-wide coronavirus screening campaign following the death of former
President, Pierre Nkurunziza who in May this year, expelled World Health
Organization's representatives from the East African country.
"We were pleasantly
surprised by the response of the population because we had planned to screen 250
people per day but we noticed that we can take more than 419 samples, which
shows that the population responded massively to the appeal launched by His
Excellency the President of the Republic," Health Minister Dr. Thaddee
Ndikumana was quoted as saying.
With a population of 11
million, Burundi has confirmed 322 virus
cases so far, including one death and 207 recoveries, according to the Africa Centres for Disease Control and Prevention. - Africa
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