AfricaFinance

IMF approves US$7.6 million debt relief for Burundi

The IMF’s debt relief for Burundi is expected to help free resources to be spent on public sector health needs and will also help mitigate the balance of payments

The International Monetary Fund says it has approved a payment of US$7.6 million in debt relief to Burundi to help address the economic impact of the COVID-19 pandemic.

It said the relief for three months could rise to $24.97 million over the next 21 months if resources are available.

“IMF debt relief will help free up resources for public sector health needs including other emergency spending and help mitigate the balance-of-payments shock posed by the COVID-19 pandemic,” the IMF said in a statement.

The IMF said it has revised economic growth projections for Burundi for 2020 downwards by more than 5 points.

“The pandemic is affecting Burundi through an evolving domestic outbreak and economic spillovers from the global and regional environment. Economic growth projections for 2020 have been revised down by 5.3 percentage points to -3.2% 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 import needs and reduced remittance inflows.”

Social safety net

Mitsuhiro Furusawa, deputy managing director of the IMF, said: “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.

“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 added, “The IMF’s debt service relief under the Catastrophe Containment and Relief Trust 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 reprioritise 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.’’

Burundi has so far had 322 cases of COVID-19 and one death.

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