The International Monetary Fund has approved a debt relief package worth $7.63 million to Burundi. IMF’s total debt relief is now $251.24 million given to 28 developing countries.
The grant is meant to help Burundi service its debt from July 21 to October 13, 2020, providing resources to cushion the country against the health and economic effects of the pandemic.
The IMF will also grant the country an additional debt cover for October 14 2020 to April 13, 2022, subject to availability of funds. This will bring its total debt assistance to Burundi to $24.97 million for 21 months.
"The IMF executive board approved debt relief under the Catastrophe Containment and Relief Trust to provide $7.63 million over the next three months, and potentially up to $24.97 million over the next 21 months.
IMF debt relief will help free up resources for public sector health needs, including other emergency spending and help mitigate the balance of payments shock posed by the Covid-19 pandemic," reads a statement by IMF.
“The Covid-19 pandemic is having an adverse economic impact on Burundi creating exceptional fiscal and balance of payments needs and the economy has slowed sharply,” said Mitsuhiro Furusawa, the IMF deputy managing director and acting chair.
Mr Furusawa said that Burundian authorities have implemented containment measures consistent with their pandemic response plan that focuses on strengthening the health care system, the social safety net, and parts of the road network to facilitate access to sick people.
Since March 2020 Burundi has recorded 345 Covid-19 cases after testing more than 11,000 people countrywide. The government launched mass testing earlier this month.
In May, the IMF granted Kenya and Uganda $1.23 billion in emergency funding to assist in alleviating the Covid-19 crisis. Kenya was allocated $739 million to cushion households and firms while Uganda received $491.5 million to meet its fiscal financing.