Abstract
Burundi is one of the poorest countries in the world. The country is emerging from more than a decade of civil conflict. The World Bank’s country assistance strategy focuses on structural reforms to further increase growth and reduce poverty. The economy is emerging from the effects of the global crisis. Performance under the Extended Credit Facility-supported (ECF) program has been satisfactory. The discussions focus on the appropriate policy mix to consolidate economic stability and support recovery of the economy. The economy is expected to continue to recover from the effects of the global crisis.
The Executive Board of the International Monetary Fund (IMF) has completed the fifth review of Burundi’s economic performance under the Extended Credit Facility (ECF) arrangement and extended the ECF arrangement to August 31, 2011.6 The decision enables the authorities to draw an additional amount equivalent to SDR 6.6 million (about US$10.4 million), bringing total disbursements under the arrangement to an amount equivalent to SDR 39.6 million (about US$62.3 million). The Board’s decision was taken on a lapse of time basis.7
In a difficult post-conflict environment, performance under the ECF-supported program was broadly satisfactory. Burundi met all of its quantitative performance criteria and structural reforms are moving ahead. Most monetary and fiscal reforms have progressed well, and steady progress has been made in implementing key structural reforms.
The three-year ECF arrangement with Burundi was originally approved on July 7, 2008 (see Press Release No. 08/167) for an amount equivalent to SDR 46.2 million (about US$75.6 million).
ECF-supported programs are based on country-owned poverty reduction strategies adopted in a participatory process involving civil society and development partners and articulated in the Poverty Reduction Strategy Paper. This is intended to ensure that ECF-supported programs are consistent with a comprehensive framework for macroeconomic, structural, and social policies to foster growth and reduce poverty.
The Extended Credit Facility (ECF) has replaced the Poverty Reduction and Growth Facility (PRGF) as the Fund’s main tool for medium-term financial support to low-income countries by providing a higher level of access to financing, more concessional terms, enhanced flexibility in program design features, and more focused streamlined conditionality. Financing under the ECF currently carries a zero interest rate, with a grace period of 5½ years, and a final maturity of 10 years (http://www.imf.org/external/np/exr/facts/ecf.htm). The Fund reviews the level of interest rates for all concessional facilities every two years.
The Executive Board takes decisions under its lapse of time procedure when it is agreed by the Board that a proposal can be considered without convening formal discussions.