Just like its East African neighbour, Burundi will receive a $271 million Extended Credit Facility from The International Monetary Fund’s executive board. The fiscal agency will provide over $62 million on an immediate basis, it said on Monday.
Under the Extended Credit Facility (ECF), the IMF granted a 38-month agreement for Burundi. With an initial payout of SDR46.2 million (about US$62.6 million), the agreement will provide funding in the amount of SDR200.2 million, or around US$271 million.
Following years of political conflict and turbulence, 1993-2005, while Pierre Nkurunziza was ruling, its economy is uplifting only now. The loan facility, according to the IMF, would support Burundi’s reform plan and help to resolve the country’s ongoing balance of payments issues. It will also help to strengthen external buffers.
Burundi has extensive development needs, an increasing current account deficit, poor foreign reserves coverage, and long-term macroeconomic problems brought on by local climate shocks, livestock sanitation problems, and spillovers from the conflict in Ukraine.
The IMF said that with the agency Burundi is getting its first Upper Credit Tranche-quality arrangement since 2015 and that the agency would “catalyse donor funding, which is essential to cater to Burundi’s large financing needs and support its exit from fragility”.