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Burundi: Sixth Review Under the Arrangement Under the Poverty Reduction and Growth Facility and Request for Waiver of Performance Criteria

Author(s):
International Monetary Fund
Published Date:
January 2008
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I. Relations with the Fund

(As of October 31, 2007)

I. Membership Status: Joined: September 28, 1963; Article XIV

II. General Resources Account:

SDR Million%Quota
Quota77.00100.00
Fund holdings of currency76.6499.53
Reserve Position0.360.47

III. SDR Department:

SDR Million%Allocation
Net cumulative allocation13.70100.00
Holdings0.191.38

IV. Outstanding Purchases and Loans:

SDR Million%Quota
PRGF Arrangements62.1580.71

V. Latest Financial Arrangements:

TypeDate of

Arrangement
Expiration

Date
Amount

Approved

(SDR Million)
Amount Drawn

(SDR Million)
PRGFJan 23, 2004Jan 22, 200869.3062.15
PRGFNov 13, 1991Nov 12, 199442.7017.21
SAFAug 08, 1986Aug 07, 198929.8929.89

VI. Projected Payments to Fund

(SDR Million; based on existing use of resources and present holdings of SDRs):

Forthcoming
20072008200920102011
Principal2.646.008.14
Charges/Interest0.290.830.830.800.76
Total0.290.833.476.808.90

VII. Safeguards Assessments

Under the Fund’s safeguards assessment policy, the Banque de la République du Burundi (BRB) is subject to a full safeguards assessment with respect to the PRGF arrangement approved on January 23, 2004. The safeguards assessment was completed on January 18, 2006. The assessment identified several vulnerabilities, in particular in the legal and control areas, including the management of foreign reserves, and the internal audit function.

VIII. Exchange Arrangements

Burundi maintains a managed float exchange regime. The U.S. dollar is the intervention currency. On December 4, 2007, the exchange rate was Fbu 1,141.61 to the US$. In 2003, the central bank eliminated most remaining exchange restrictions on current international transactions and delegated authority to the commercial banks to approve standard transactions. In early 2004, the surrender requirement was lowered to 50 percent and eliminated in early 2005. The central bank admitted foreign exchange bureaus to the weekly auctions. Most external payments arrears to bilateral and multilateral creditors were cleared by end-2005. In December 2006, the government published a new foreign exchange regulation, which liberalized foreign exchange for current transactions and removed one multiple currency practice.

Burundi availed itself of the transitional arrangements of Article XIV when it joined the Fund in 1962, but no longer maintains exchange restrictions or multiple currency practices under Article XIV. Burundi maintains one multiple currency practice inconsistent with Article VIII, Section 2(a): the exchange rate used for government transactions takes place at a rate that may differ by more than 2 percent from market exchange rates. Burundi maintains certain foreign exchange restrictions for security reasons, and has notified those restrictions to the Fund pursuant to Decision 144-(52/51). The authorities have not requested, and staff does not propose, approval of the multiple currency practice.

IX. Article IV Consultation

In accordance with decision No 12794-(02/76), as amended by Decision No 12854-(02/96), Burundi is on the 24-month Article IV cycle due to the approval of a PRGF in [Jan 23, 2004]. The 2006 Article IV consultation was completed by the Executive Board on July 14, 2006 (Country Report 06/311), along with the consideration of the third and fourth reviews under the Poverty Reduction and Growth Facility (PRGF).

In concluding the 2006 Article IV consultation, Executive Directors welcomed the commendable progress that Burundi made in 2005 in implementing its PRGF-supported program in a difficult post-conflict environment. They welcome the progress made on the enhanced HIPC Initiative completion point triggers but emphasized the need for the authorities to pay particular attention to reinforcing government’s capacity to deliver social services. They noted the need to reinforce good governance and transparency practices, including public financial management and through the progressive withdrawal of state intervention in the economy.

X. Technical Assistance

2007 (Nov.)AFRITAC capacity building in banking supervision mission
2007 (Nov.)FAD tax policy mission
2007 (Nov.)STA monetary statistics mission
2007 (Sep.)MCM multitopic mission
2007 (Sep.)AFRITAC tax revenue administration
2007 (Sep.)AFRITAC capacity building of central bank mission
2007 (Sep.)FAD public financial management mission
2007 (Jul.)AFRITAC PFM on payroll control
2007 (Jun.)AFRITAC PFM mission on treasury operation and control
2007 (Jun.)MCM technical assistance mission
2007 (Jun.)AFRITAC capacity building on debt management mission
2007 (Mar.)FAD resident expert on public accounting
2006 (Dec.)FAD public expenditure management mission
2006 (Nov.)MCM banking supervision mission
2006 (Sep.)FAD customs and tax administration mission
2006 (Apr.)MCM foreign exchange reserve management mission
2006 (Mar.)STA mission to prepare the metadata and medium-term action plan
2006 (Mar.)MFD/LEG joint Article VIII mission
2006 (Jan.)LEG AML/CFT legislative drafting mission
2006 (Jan.)Monetary operations/FOREX/banking supervision mission
2005 (Dec.)STA balance of payments statistics (external debt accounting) mission
2005-06MFD resident expert on monetary operations and money markets
2005 (Oct.)FIN safeguard assessment second step mission
2005 (Oct.)FAD public financial management mission
2005 (Oct.)FAD customs administration mission
2005 (Oct.)MFD expert on monetary operations mission

XI. Implementation of HIPC Initiative

Enhanced Framework
I. Commitment of HIPC assistance
Decision point dateAug 2005
Assistance committed by all creditors (US$ Million) 1826.00
Of which: IMF assistance (US$ million)27.84
(SDR equivalent in millions)19.26
Completion point dateFloating
II. Disbursement of IMF assistance (SDR Million)
Assistance disbursed to the member0.17
Interim assistance0.17
Completion point balance--
Additional disbursement of interest income 2--
Total disbursements0.17

Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts can not be added.

Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts can not be added.

Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

XII. Resident Representative

A part-time Resident Representative took up the post in May 2005 and an office with an administrative assistant started operating in January 2006 in Bujumbura. Mr. Israel de la Piedra has been IMF’s Resident Representative to Burundi since May 2007.

II. Relations with the World Bank Group

(As of November 30, 2007)

A. Partnership in Burundi’s Development Strategy

Burundi has just emerged from a thirteen-year civil war, following the signing of a comprehensive peace and reconciliation agreement by 39 politico-ethnic groups in Arusha (Tanzania) in August 2000, which marked a significant political turning point. Following the establishment of a transitional government in 2002, a new constitution, intended to provide appropriate ethnic checks and balances, was approved in February 2005. Presidential and parliamentary elections were held in August 2005 and a democratically elected government took office in September 2005. In September 2006, a cease-fire accord was reached with the last holdout rebel movement, the FNL-PALIPEHUTU faction.

The preparation of the full PRSP was launched in May 2004 under the leadership of the Head of State. The PRSP builds upon the I-PRSP discussed by the Boards of the IDA and the Fund in January 2004, and was completed and published in September 2006, and presented to IDA and IMF Boards in March 2007. The PRSP has benefited from broad and inclusive consultations with all stakeholders at the national, provincial and communal levels. The strategy focuses on four main priority areas: (i) improved governance and security; (ii) equitable and sustainable growth; (iii) developing human capital by improving the quality of social services; and (iv) reinforcing the fight against HIV/AIDS.

B. Bank–Fund Collaboration in Specific Areas

The Bank and Fund teams have been closely coordinating their assistance programs and policy advice to help the Government implement its development strategy. There is also good cooperation in the policy dialogue on structural issues, in particular crucial reforms in the coffee sector. The Bank is leading the policy dialogue on structural aspects of the reform program. The Fund is leading the dialogue on macroeconomic issues, in particular fiscal, monetary, and exchange regime policies. Both institutions are providing significant technical assistance, especially in the area of public finance management (PFM). The Fund and the Bank have both contributed to the Diagnostic Trade Integration Study under the Integrated Trade Framework—a review of the policy, regulatory, and institutional framework—with the objective of promoting employment-generating trade. Collaboration was intensified in 2005, as Burundi’s full PRSP and the HIPC Decision Point Document were prepared. Recently, the Fund and the Bank have jointly carried out a Debt Sustainability Assessment (DSA), which examines the external and public debt dynamics of the country. Table 1 summarizes Bank-Fund collaboration in specific areas.

Table 1:Summary of Bank-Fund Collaboration
Thematic areaAreas of collaborationBankFund
PRSP process.Finalization of the full PRSPAssisted in the preparation of participatory consultations and workshops; coordination of donors, poverty survey and analysis; Prepared the Joint Staff Advisory Note (JSAN) on the full PRSP; in the process of preparing the JSAN on the first annual Progress Report of the PRSP whose preparation by the Government has recently begun..Commented on the design of macroeconomic framework in the PRSP; Prepared the Joint Staff Advisory Note (JSAN) on the full PRSP; in the process of preparing the JSAN on the first annual Progress Report of the PRSP whose preparation by the Government has recently begun.
Macroeconomic stability and development.Development agenda in poverty reduction goals.Complement Fund’s macroeconomic policy with various broad structural and sector works through policy advice, lending and capacity building especially in the areas such as budget management, agriculture, energy, infrastructure, and telecommunications sectors.Fund leads on the macroeconomic policy dialogue, including on fiscal, monetary, and exchange rate policies. Fund has been supporting Burundi through a PRGF approved on January 23, 2004, extended to January 22, 2008 Program measures and TA have targeted improved national statistics.
Collaboration in growth oriented reforms of the Government.Technical assistance (TA) in developing macro framework and related issues under the IDA EMSP.

Prepare the Debt Sustainability Assessment (DSA) of debt dynamics.
The PRGF supported program, has focus on removing the structural impediments to sustained growth

Prepare the Debt Sustainability Assessment (DSA) of debt dynamics.
Public financial managementCollaboration in institutional and structural reforms including procurement code, a basic computerized financial management information system (IFMIS); expenditure management, an investment management system, and budget planning.TA for: (i) the completion of the Public Expenditure Review (PER) under the Emergency Economic Recovery Credit (EERC); (ii) the Country Financial Accountability Assessment (CFAA), and (iii) Country Procurement Issue Paper (CPIP) and the preparation of a comprehensive action plan to reform procurement. The Bank has also provided under the Economic Management Support Project (EMSP) TA in the computerization of public finance management (IFMIS).TA has been in the area of expenditure management and control, the introduction of a basic IFMIS, the elimination of extra-budgetary funds, and to a treasury single account. A resident expert has been posted at the Ministry of Finance. The new AFRITAC Center will provide peripatetic technical assistance.

The Fund has worked to reinforce donor coordination on budget support and TA.
Strengthening capacities in the areas of financial accountability and budget monitoring.Financing and provision of technical assistance in budget management and financial accountability, notably to the National Auditing Court (Courdes Comptes).

The Bank has also supported the reinforcement of capacity for the Courdes Comptes judges, parliamentarians, and media through IDA EMSP. The Bank will also strengthen the capacity of the State General Inspectorate (IGE) for internal audit and control. A consultant is being hired to provide support to the PETS.
TA in the areas of: (i) functional classification for expenditure including a sub-classification for poverty related outlays; (ii) an new budget and accounting code; and (iii) expenditure tracking and control
Reforming revenue policy and administrationThe Bank has provided TA to redraft the tax code. The Bank also provided support to customs administration and to the study on the introduction of the VAT.TA has been provided on customs administration; import tariffs; reinforcement of tax administration; and tax policy reform.
Structural and policy reforms and financial sector.Collaboration in key institutional and structural reforms legal and judicial reform in establishing commercial courts and other regulatory reforms.The Bank has provided support in: (i) the restructuring of the banking sector, including privatization, under ERSG; (ii) the creation and the functioning of the Arbitration Center through the EMSP. Support will be given to the Ministry of Justice and Ministry of Commerce for the revision and dissemination of the Commercial code and the bankruptcy code. The Bank is helping the reforms in coffee, tea, and cotton sectors, in addition to micro-finance.In the structural area the PRGF has focused on the removal of trade restrictions and the freeing of prices and marketing in key sector such as coffee and sugar.

TA to the central bank on banking supervision, prudential regulation, reserves management, monetary policy analysis, and liquidity management.
Governance and corruptionCollaboration in the:

(i) preparation of a national anti-corruption strategy; (ii) governance diagnostic survey.
The Bank is expected to provide technical assistance for the preparation of a governance diagnostic survey. Also, mindful of the limited human and managerial capacity at the Ministry of Good Governance, the Bank will help in reinforcing the capacity at this line ministry and for anti-money laundering control. The Bank has also contributed and provided support to the audit of domestic arrears and the strategy for their clearanceUnder the IMF safeguards policy the central bank has conducted regular external audits, initiated an internal audit, and strengthened governance. TA in drafting the anti-money laundering law (AML/CFT). The PRGF-supported program has also targeted the reinforcement of cash management at the coffee parastatal, OCIBU, and the reinforcement of oversight of the public sector.
Infrastructure and private sector developmentCollaboration in business policies especially in the areas of taxation, budget, and legal and institutional development.The Bank has been supporting this area through its infrastructure projects in road sector, and public works and employment. The Bank will also support the preparation of a privatization program for a number of public enterprises identified in the ERSG grant.

Based on the investment climate survey carried out in June 2006, the Bank is preparing an Investment Climate Assessment (ICA) to identify the constraints to the development and growth of the private sector.
The focus has been on the elimination of distortions in the tax system, clearance of budgetary arrears with the private sector, and support of the privatization effort.
Agriculture and rural development.Collaboration in restoring the productive ability of the rural sector.World Bank is supporting this sector through its Agricultural Rehabilitation and Sustainable Land Management Project (ARSLMP), which aims to raise productivity and incomes among rural population, through: (i) investments in production and sustainable land management; (ii) capacity building for producer organizations, and local communities, including war-distressed returnees and internally displaced persons. The Bank will assist in the privatization of the coffee and tea sectors.
Social sector and community development.Development agenda in poverty reduction and social sectors.The Health and Population Project and the multisectoral HIV-AIDS and Orphans Project are supporting the social sector development in the area of HIV-AIDS, population and health.

C. World Bank Group Program and Portfolio

A Country Assistance Strategy (CAS) preparation is underway and is expected to be discussed by the Board in May 2008. The current Bank support projects are key elements of the Interim Strategy Note (ISN), discussed by the Board in May 2005 and covering FY06 and FY07, and are aligned with the priorities of the I-PRSP on which the four pillars of the PRSP mentioned above built upon. The ISN aimed at (a) addressing the country’s social needs, including access to basic services, enhanced employment opportunities, and stronger social capital in particular within rural communities; and (b) creating the basis for a sustained economic recovery and growth. IDA is supporting the country’s development strategy through a series of fast-disbursing and investment operations (Table 2).

Table 2:Status of Active Operations
ProjectUS$ mil.ObjectiveApproval/

Effectiveness
Disbursed

December

02, 2007

(%)
Ratings
DOIP
Agricultural Rehabilitation and Sustainable Land Management Project35To restore the productive capacity of rural areas, through: (i) investments in production and sustainable land management; (ii) capacity building for producer organizations and local communities, including war-distressed returnees and internally displaced persons.July 2004/

September 2004
69.0Ss
Agricultural Rehabilitation and Sustainable Land Management - Global Environment Facility (GEF) Project5To support analysis and advisory activities to design a modern, national institutional framework for land management and to strengthen national planning for land resources, including a national land management plan.July 2004/

September 2004
72n/as
Emergency Demobilization Reinsertion and Reintegration Program33To help consolidate peace in Burundi and the Great Lakes region by: (i) demobilizing soldiers and ex-combatants and providing targeted support to facilitate their return to civilian life; and (ii) contributing to the reallocation of government expenditures from military to social and economic sectors.March 2004/

September 2004
73.0MUMU
Transport Infrastructure Rehabilitation Project51.4To contribute to Burundi’s post-war revival by restoring part of the priority road network, generating employment for the rural poor, and improving institutional capacity in the road sector.March 2004/

September 2004
44.0MSMS
Economic Management Support Project (EMSP)26To increase the efficiency of Burundi’s macroeconomic, financial, and administrative management by strengthening accountability and transparency through improved procedures and controls.January 2004/April 200430.0SS
Economic Reform Support Grant (ERSG)60To help implement the Government’s economic reform program during 2006 and Burundi’s Interim PRSP by supporting key policy measures aimed at: (i) improving public expenditure management and their impact on the poor; and (ii) accelerating growth.August 2006/

November 2006
59.0MSMS
Multisectoral HIV/AIDS Control and Orphans Project36To support the national program as set forth in its Action Plan for the Struggle against HIV/AIDS for the period 2002-2006, through actions involving in-line ministries, civil society, private enterprises, labor unions, in addition to women and youth, and nongovernmental organizations (NGOs).June 2002/October 2002113.0SS
Public Works and Employment Creation Project (with additional grant of US$ 30.6 million approved in December 2005)70.6To contribute to the peace process and reconstruction of Burundi through generation of productive and labor-intensive employment.January 2001/June 2001100.0SS
Community and Social Development Project40To establish and operationalize a decentralized, participatory, and transparent financing mechanism that empowers local government and communities to provide better and equitable local service delivery. The project will achieve its objective through community empowerment, capacity building (planning, managerial, financial and technical), investments in socioeconomic projects, and social cohesion activities.March 2007/August 20077.0SS
Regional Communications Infrastructure Project20.1To leverage private sector participation to improve open access to international connectivity in East and Southern Africa. The focus is on closing the terrestrial connectivity gap, extending geographic reach of broadband networks and contributing to lower prices for international capacity.March 2007/

November 2007
0.0n/an/a
Education Sector Reconstruction Project20To educate a rapidly increasing number of primary-level students by improving the capacity and infrastructure of the country’s school system. It will respond to the significant increase in the rate of enrollment by expanding school infrastructure through supporting the Ministry of National Education and Culture’s School Infrastructure Plan.February 2007/May 20078.0SS

International Development Agency (IDA) program. As of December 02, 2007, the active portfolio comprised eleven operations (including a regional telecommunication project) with a total commitment value of US$ 392 million (of which about US$ 185 million remain undisbursed). IDA has financed projects in (i) post-conflict rehabilitation and reintegration; (ii) education; (iii) health, HIV/AIDS and social policy reforms; (iv) public works (water sanitation and flood protection) and job creation; (v) transportation (roads and highways) rehabilitation; (vi) agriculture rehabilitation; (vii) regional communications infrastructure; and (viii) economic management, and a policy-based quick-disbursing operation (Economic Reform Support Grant).

On August 1, 2006, the Board approved a budget support operation (Economic Reform Support Grant, ERSG) in the amount of US$60 million to the Republic of Burundi to help its government carry out a set of reforms in the areas of public finance management, cash crop sectors and private sector development. About 60 percent of the proceeds of this operation financed the country’s 2006 budget while the remainder (US$25 million) is allocated toward the 2007 budget. A successor budget support operation (ERSG 2) in the amount of US$50 million is currently under preparation and expected to be presented to the Board in May 2008. The IMF is supporting the Government’s program with a PRGF. In practice, there is close collaboration between the Bank and Fund in many areas, particularly those related to growth and poverty reduction.

Nonlending activities: The Bank and the IMF have conducted a Joint Staff Assessment Note of the PRSP which was completed in March 2007. A Sources of Rural Growth study was also recently concluded a Public Expenditure Management and Financial Accountability Review (PEMFAR) under preparation jointly with the authorities is expected to be delivered in FY08, as well as a Health Sector Finances report and an Investment Climate Assessment (ICA) report.

International Finance Corporation (IFC). Burundi has been a member of IFC since 1975. With the peaceful transition, prospects for IFC involvement in Burundi are improving. An IFC mission in January 2005, followed by a joint IFC-Bank PSD (Africa Region) mission in May 2005 discussed two areas of possible IFC intervention: (i) support to the country’s privatization program, including possible transaction implementation advice on the privatization of the incumbent fixed-line telecommunications company, ONATEL; and (ii) potential investment in Burundi’s largest commercial Bank (Banque de Crédit de Bujumbura, BCB). In November 2006, another IFC mission was conducted to discuss with the government on the possibility of IFC-Corporate Advisory Services (CAS) to act as transaction advisor for the privatization of ONATEL. IFC is exploring opportunities for Burundi’s banks to participate in IFC Global Trade Finance program, which presents the best opportunity for IFC to intervene in the country’s financial sector. In October 2007, IFC announced that BCB will receive an uncommitted trade finance line (from IFC’s Global Trade Finance Program) of up to US$2 million to facilitate its international trade finance operations. This facility was launched in 2005 to support trade with emerging markets worldwide and promote flows of goods and services between developing countries.

Following the Government’s intention to privatize NOVOTEL, there is potential for IFC participation in the rehabilitation and modernization of the hotel, and the provision of financial assistance to private hotel operators to meet a high demand for quality accommodation in Burundi. IFC is currently considering providing term financing for expansion projects of the following companies: OLD EAST SA, a commercial real estate company, and BRARUDI, a brewery jointly owned by the state and Heineken.

Multilateral Investment Guarantee Agency (MIGA). Burundi became a member of MIGA in March 1998. MIGA’s outstanding portfolio consists of one contract of guarantee in the infrastructure sector, with a gross exposure of US$0.9 million, and a net exposure of US$0.8million. The total estimated amount of foreign direct investment facilitated to-date by MIGA is approximately US$1.8 million. Currently, there are no active projects in MIGA’s pipeline for Burundi. However, one contract with Mauritius Telecom for US$0.9 million was signed in FY03.

World Bank Institute (WBI). Since July 1, 2006, Burundi became one of 14 African countries out of 44 focus countries for WBI programs. These countries are priority countries for WBI. For FY07, the WBI program for Burundi includes (i) a Leadership program; and (ii) a Governance and Anticorruption (GAC) diagnostics. The Government asserted its interest in improving governance and reducing corruption through increased transparency in the management of public goods. This engagement was reflected in a letter addressed to the President of the World Bank in 2006, requesting assistance to carry out an in-depth, in-country governance and anticorruption diagnostics.

World Bank staff: Questions may be referred to Marie Francoise Marie-Nelly ((202) 473-6264, and Jean-Pascal N. Nganou ((202) 458-8054).

III. Relations with the African Development Bank Group

(As of November 30, 2007)

Burundi has been a member of the AfDB Group since its foundation in 1964. The AfDB’s grant and loan operations with the country were interrupted by the outbreak of civil strife in 1993. On July 19, 2004, the AfDB Boards approved general policy guidelines to assist post-conflict countries to clear their arrears and created a facility, the PCCF, initially funded with about SDR 100 million in AfDB funds, to provide financial assistance to qualifying post-conflict countries. The policy guidelines call for a three-way burden-sharing formula among the country, donors, and the PCCF. On October 27, 2004, the AfDB Boards endorsed a specific arrears clearance proposal for Burundi whereby the balance of arrears was settled with the help of donors and the PCCF before the Decision Point under the enhanced HIPC Initiative.

On November 24, 2005, the Boards of Directors of the African Development Bank (ADB) and the African Development Fund (ADF) agreed that Burundi had effectively met the conditions and reached the decision point under the enhanced framework of the Heavily Indebted Poor Countries (HIPC) Initiative. The Bank Group’s share of debt relief will amount to US$149.35 million in present value terms (US$226.01 million in nominal terms), which is equivalent to about 21 percent of the multilateral creditors’ assistance, and about 18 percent of total assistance from all creditors. This amount will save up to 90 percent of Burundi’s debt-service obligations annually until February 2043.

Under its FAD 9 allocation, following the lifting of sanctions in October 2004, on July 7, 2004, the Bank Group approved a grant of SDR 2.13 million to finance training of civil servants and procurement of equipment for institutions in charge of economic management and the civil society. A structural adjustment credit totally SDR 6.72 million, in one tranche, accompanied by a further grant of SDR 1.5 million for institutional support, was approved by the Board on December 2004. A multi-sector project, totaling SDR 9.8 million, was also approved on December 2004. Under its FAD 10 allocation, the Bank Group approved in December 2005 a grant of SDR 12 million to finance rural water infrastructure rehabilitation and, in March 2006, a SDR 9 million to finance the watershed management project. In November 2006, the Bank Group approved one more grant: SDR 7.3 million, in one tranche, to finance economic reforms and governance support program.

African Development Bank Operations in Burundi
Outstanding

loans
Past-due

obligations
(In millions of SDRs)
African Development Bank0.00
African Development Fund138.70
Nigerian Trust Fund1.40
Total140.10

IV. Statistical Issues

While there is a critical mass of data sufficient to monitor a program supported by the Fund, data provided to the Fund are inadequate to permit effective surveillance because of acute shortcomings in the national accounts, government finance, and balance of payments statistics. STA missions have found that staffing shortages, insufficient funding, and lack of equipment hamper the production and dissemination of macroeconomic statistics. There has been a poor coordination among institutions responsible for the compilation of statistics.

Following the authorities’ interest in participating in the General Data Dissemination System (GDDS), in March 2006 a STA mission assisted the authorities in preparing metadata and, in collaboration with the World Bank and donors, helped develop a remedial plan. The authorities referred to this action plan in their Poverty Reduction Strategy Paper, which was approved in September 2007 and a national statistical development strategy is being prepared with donor’s assistance. On September 25, 2007, the government promulgated a new statistics law and in December 2007 approved the accompanying regulatory texts. Burundi is expected to become a GDDS participant in early 2008, once the authorities complete reviewing the metadata on data compilation practices.

Outstanding statistical issues

Real sector

Serious deficiencies in real sector data handicap analysis and macroeconomic management, with national accounts last compiled for 1998. Source data on agriculture, the most important activity, is extremely weak. Since 1998, Burundi has reported annual national accounts estimates to the Fund with about a three-month lag, but these are derived from a macroeconomic projection model maintained by the Ministry of Economy, Finance, and Development Cooperation (MEFD). The consumer price index (CPI) is compiled on a monthly basis. Its coverage has been extended to include provinces and not only the capital, Bujumbura. Weights are based on an outdated 1991 household expenditure survey, and are expected to be revised in 2008. There are no producer price indices, and data on employment are out of date.

Government finance

Central bank compiles government finance statistics using source data from the MEFD. Computerized ledgers are seldom maintained by ministries, preventing establishment of balances and other accounting controls. Limited accounting information is available on extra-budgetary units. The absence of detailed information on revenue and expenditure reduces the transparency of government accounts. There are also problems in recording arrears on external debt and current expenditure financed by foreign grants, leading to significant discrepancies between the balance of revenue and expenditure and financing estimates. With World Bank assistance, a partial public financial management information system that generates standard quarterly budget execution reports was implemented in 2005 and is now operational. However, its coverage and quality need to be improved. Government finance statistics transactions data up to the fourth quarter of 2004 have been reported in the International Finance Statistics, with government debt figures reported to the second quarter of 2005. No data have been reported for publication in the Government Finance Statistics Yearbook since 1999.

Monetary statistics

The central bank has made progress in submitting monetary statistics using the new Standardized Report Forms (SRFs), which are expected to be completed during the first half of 2008. A Fund technical assistance mission during November 22–December 4, 2007 helped the BRB to improve its monetary and financial statistics from 2000 onwards. The BRB needs to adopt the Monetary and Financial Statistics Manual methodology, which would facilitate the harmonization of its monetary statistics with other member countries of the East African Community.

Balance of payments

Annual balance of payments and international investment position statistics are compiled according to the fifth edition of the Balance of Payments Manual (BPM5). Merchandise trade statistics are derived from customs data, but no adjustments are made for unrecorded international trade flows such as gifts in kind that do not go through the banking system. Data for services are collected mostly through bank settlement reports. Income estimates are almost exclusively derived from monthly bank settlement reports. For both services and income, the accuracy of the source data is not routinely assessed against other available data sources. Data on current and capital transfers, as well as on financial accounts are incomplete and further BRB action is needed to improve their quality and reliability.

Burundi: Table of Common Indicators Required for Surveillance(As of December 7, 2007)
Date of

latest

observation
Date

received
Frequency

of Data6
Frequency

of

Reporting6
Frequency

of

Publication6
Exchange RatesCurrentCurrentDMM
International Reserve Assets and Reserve
Liabilities of the Monetary Authorities1Sep. 2007Oct. 2007MMM
Reserve/Base MoneySep. 2007Oct. 2007MMM
Broad MoneySep. 2007Oct. 2007MMM
Central Bank Balance SheetSep. 2007Oct. 2007MMM
Consolidated Balance Sheet of the Banking SystemSep. 2007Oct. 2007MMM
Interest Rates2Aug. 2007Nov. 2007MMM
Consumer Price IndexOct. 2007Nov. 2007MMM
Revenue, Expenditure, Balance and Composition of Financing3—General Government4NANANANANA
Revenue, Expenditure, Balance and Composition of Financing3—Central GovernmentSep. 2007Nov. 2007QQQ
Stocks of Central Government and Central Government-Guaranteed Debt5NANANANANA
External Current Account BalanceDec. 2006Mar. 2007AAA
Exports and Imports of Goods and ServicesJul. 2007Sep. 2007MMM
GDP/GNP1998Sep. 2003AAA
Gross External DebtSep. 2007Oct. 2007MMA

Includes reserve assets pledged or otherwise encumbered, as well as net derivative positions.

Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds), and state and local governments.

Including currency and maturity composition.

Daily (D), weekly (W), monthly (M), quarterly (Q), annually (A), irregular (I); and not available (NA).

Includes reserve assets pledged or otherwise encumbered, as well as net derivative positions.

Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds), and state and local governments.

Including currency and maturity composition.

Daily (D), weekly (W), monthly (M), quarterly (Q), annually (A), irregular (I); and not available (NA).

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