Burundi gets debt relief

BUJUMBURA – Burundi said it will save between US$40 million (N$260m) and US$50 million a year from its recently announced US$1,5 billion multilateral debt service relief and plans to spend that on health and education.

“This is really a historic decision for a country which comes from more than a decade of civil war,” the tiny Central African nation’s Finance Minister Athanase Gahungu told reporters late on Monday. “With these savings, we will build more schools and hospitals.”On Thursday, the International Monetary Fund (IMF) and World Bank approved US$1,5 billion in debt service relief to Burundi, although it said the nation would still need international help.”The country must feel proud as it fulfilled the economic reforms requested by the two financial institutions in a very difficult moment,” Gahungu added.Burundi qualified for the relief under a World Bank and IMF programme for poor, debt-burdened countries that requires a series of economic reforms and other steps be taken, the lenders said.The money saved from the debt relief will also help importers as the country was facing a foreign currency shortage due to poor coffee production this year, Central Bank governor Toyi Salvator also said.Summarising Burundi’s economic reform programme, Gahungu said it would leave coffee exports to private companies with a state regulator only intervening to supervise prices.”A country like Rwanda sells its coffee well because it has promoted liberalisation.So Burundi state must leave the selling of coffee to private people,” he said.He also said the country was planning to diversify its export crops so that it stopped relying on coffee and tea.Gahungu said that among other reforms, Burundi wants to expand its tax base and to reduce customs taxes to 10 per cent to reduce smuggling.-Nampa-Reuters”With these savings, we will build more schools and hospitals.”On Thursday, the International Monetary Fund (IMF) and World Bank approved US$1,5 billion in debt service relief to Burundi, although it said the nation would still need international help.”The country must feel proud as it fulfilled the economic reforms requested by the two financial institutions in a very difficult moment,” Gahungu added.Burundi qualified for the relief under a World Bank and IMF programme for poor, debt-burdened countries that requires a series of economic reforms and other steps be taken, the lenders said.The money saved from the debt relief will also help importers as the country was facing a foreign currency shortage due to poor coffee production this year, Central Bank governor Toyi Salvator also said.Summarising Burundi’s economic reform programme, Gahungu said it would leave coffee exports to private companies with a state regulator only intervening to supervise prices.”A country like Rwanda sells its coffee well because it has promoted liberalisation.So Burundi state must leave the selling of coffee to private people,” he said.He also said the country was planning to diversify its export crops so that it stopped relying on coffee and tea.Gahungu said that among other reforms, Burundi wants to expand its tax base and to reduce customs taxes to 10 per cent to reduce smuggling.-Nampa-Reuters