Burundi: Request for a 38-Month Arrangement under the Extended Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for Burundi

This paper highlights Burundi’s Request for a 38-Month Arrangement under the Extended Credit Facility (ECF). Burundi faces protracted balance of payments needs with a widening current account deficit and low foreign reserves coverage, large development needs, and macroeconomic challenges triggered by spillovers from the war in Ukraine and domestic climate shocks and livestock sanitary crisis. The 38-month arrangement under the ECF will help cushion Burundi’s adjustment and support the authorities’ reform agenda aimed at reducing debt vulnerabilities, recalibrating exchange rate and monetary policies to restore external sustainability, and strengthening inclusive economic growth and governance. Under the ECF arrangement, the authorities aim to recalibrate Burundi’s macroeconomic policy mix. They plan to restore external sustainability with the unification of the official and parallel exchange rate markets and foreign exchange market liberalization, while being attuned to financial sector vulnerabilities. They will strengthen debt sustainability and achieve a better-quality fiscal consolidation path through higher domestic revenue mobilization, scaled-up investment and better targeted spending, and prudent borrowing.