The International Monetary Fund said Tuesday that though supply chains in Burundi’s neighbours and trading partners had been disrupted by the COVID-19 pandemic, Burundi itself had not experienced a heavy impact.
The Burundian economy was moderately affected by the COVID-19 pandemic, said the IMF in a statement following consultations with Burundian government.
Burundi will also be getting $78m loan to ‘address the economic and social impacts of the COVID-19 pandemic.’ It is the first loan Burundi has got to deal with COVID-19 response.
The IMF said Burundi’s real GDP contracted by about one percent in 2020. The tertiary sector (including hotels, restaurants, commerce, and transportation) bore the brunt of the shock, impacted by travel and border restrictions and disruptions of supply chains in trading partner countries.
Hopwever, the Fund pointed out that the downturn was cushioned by steady growth in subsistence agriculture and construction activity including public infrastructure projects.
The Burundian economy is expected to rebound mildly in 2021 to about 2 percent, supported by stronger activities in the secondary and tertiary sectors as supply chain issues wane. Inflation turned positive in 2020 at 7.5 percent (up from -0.7 percent in 2019), driven by rising food prices. Risks to the macroeconomic outlook are tilted to the downside, including the risks of a longer second wave of COVID-19.
International reserves remain critically low, said the IMF. Exports decreased, reflecting partly the closure of borders, including Burundi’s international airport, and lockdown measures in trading partners to slow down the spread of COVID-19.
“The current account deficit however improved in 2020 thanks to lower international fuel prices triggered by the pandemic, countercyclical workers’ remittances, and imports compression due to foreign exchange rationing,” added IMF.
““Revenue collection was strong in 2020/21, exceeding budget targets and with an increase of one percentage point of GDP compared to 2019/20.”
Right from when the coronavirus emerged in late 2019, apart from closing its border, Burundi has not impelemnted the control measures such as masks, social distancing and lockdowns. Life inside Burindi has gone on fully uninterrupted. Bars operate, so do concerts and all other gatherings.
What is happening in Burundi is a complete contrast of how the virus has been handled in its neighbours. The country has not even ordered for any vaccines. The government also stopped releasing infection numbers, occasionally issuing general numbers after certain periods.
However, according to reports, there is a very strict testing and quarantine system for foreigners visiting or Burundians arriving from outside. The government, say analysts is ensuring the virus is not imported.