The International Monetary Fund (IMF) has identified the reform of Burundi's foreign exchange market as the most impactful economic change for the country in the medium term. This key recommendation was made during an IMF mission led by Alexandre Cailloux, which visited Burundi from March 17 to March 28, 2025, for annual consultations. Samuel Delepierre, the IMF Representative in Burundi, stated that unifying the exchange rate, increasing flexibility, and progressively liberalizing the market would reduce economic distortions and end difficulties in accessing foreign currency at the official rate. These recommendations from the IMF are not new; the institution has been advocating for these reforms for several years, showing their persistent importance for Burundi's economic health.
The IMF believes such a reform would significantly enhance Burundi's appeal to foreign investors, fostering an environment more conducive to international capital. Delepierre indicated that unifying the exchange rate would improve prices paid to coffee farmers and contribute significantly to the revival of the coffee sector, a vital component of Burundi's agricultural economy. The reform is also expected to mechanically increase the value of development aid once it is converted into local currency, providing a stronger financial impetus for various projects and initiatives.
Economic Distortions and IMF Diagnosis
The International Monetary Fund (IMF) stated on April 15, 2025, that Burundi's dual exchange rate regime, coupled with a significant premium on the parallel market, creates widespread economic distortions. Samuel Delepierre reiterated that unifying the exchange rate, increasing its flexibility, and gradually liberalizing the market would reduce these distortions and alleviate difficulties in accessing foreign currency at the official rate. According to the IMF, this situation contributes to persistent fuel shortages, disruptions in supply chains, illegal exports, increased informality in the economy, and widespread tax evasion within the country. The IMF's recommendations specifically include unifying the official and parallel exchange rates, a gradual liberalization of the foreign exchange market, and a transition to a more flexible exchange rate regime to address these systemic issues.
Faustin Ndikumana, a prominent Burundian economic analyst and Director of Parcem, noted that a structural problem is clearly evident when the dollar trades at nearly double the official rate on the parallel market. Ndikumana questioned the designation of a market handling approximately 70% of imports as informal or parallel, noting the critical role it plays in the nation's commerce. He pointed out that the official market only covers about 30% of imported goods and products, which he deemed grossly insufficient, citing the ongoing fuel crisis as a stark example of this inadequacy. Ndikumana also denounced privileges granted to certain actors who receive preferential access to official foreign currencies, suggesting that this system facilitates illicit enrichment at the expense of the broader economy. Drawing a vivid parallel with the fuel shortage, he explained that a privileged group obtains fuel at 4,000 BIF per liter, while others are forced to purchase it on the parallel market for 12,000 to 15,000 BIF or even more, illustrating the deep inequities. Ndikumana attributed Burundi's economic stagnation to what he termed "crony capitalism" and a "lack of patriotism" among certain influential groups.
Benefits of Unification and Necessary Accompanying Measures
Potential benefits of exchange rate unification include a rapid reduction in fuel shortages, according to analyses. Unification could also stimulate export sectors by increasing the value of exports when converted into Burundian francs, thereby boosting local producers' earnings. The reform is expected to mechanically increase the value of development aid once it is converted into local currency, providing more resources for national development initiatives. The improved transparency and efficiency brought by unification are also anticipated to make Burundi a more attractive destination for foreign direct investment.
Gabriel Rufyiri, President of the Observatoire de lutte contre la corruption et les malversations économiques (Olucome), insists that exchange rate unification cannot succeed without accompanying measures. He advocates strongly for transparent management of foreign currencies as a critical component of the reform, arguing that without it, the benefits of unification could be undermined. Rufyiri also calls for multiplying sources of foreign currency by vigorously developing key export sectors. He specifically noted minerals, coffee, tea, and cotton as sectors to prioritize for export growth, recognizing their potential to generate much-needed foreign exchange. Additionally, Rufyiri emphasizes that improving governance is absolutely essential to attract foreign direct investment and build confidence among international partners, which would further bolster foreign currency reserves and ensure the sustainability of economic reforms. He firmly believes that the rejection of this reform is partly due to vested interests who profit handsomely from the current distorted exchange rates.
Expert and Civil Society Views on the Path Forward
Gabriel Rufyiri, President of the Observatoire de lutte contre la corruption et les malversations économiques (Olucome), stated that the IMF's recommendations on unifying exchange rates constitute a universal economic principle applied worldwide. Rufyiri emphasized, "the IMF's advice is truly economic advice and there is no other choice," adding, "It is an obligation, no other choice." He believes that maintaining two exchange rates severely harms the credibility of the Burundian economy on the international stage, discourages foreign investors from committing capital, creates significant distortions among economic operators, and complicates the key work of the Office burundais des recettes (OBR) in revenue collection. Rufyiri acknowledged that the reform would be painful, describing it as "bitter medicine" that the government must take for the long-term health of the economy. "It's a bitter medicine, unfortunately, it's a medicine that the government must take," he stated. Rufyiri attributes the rejection of this reform partly to vested interests who profit from the current exchange rates, noting, "There are people who get rich with these exchange rates," showing the political and economic challenges of implementing such a reform.
Faustin Ndikumana, Director of Parcem, stated that the differential between the official and parallel exchange rates is a clear symptom of a deep economic crisis that has plagued Burundi for too long. Ndikumana advocates for the liberalization of the foreign exchange market, the creation of exchange bureaus to increase accessibility and transparency, and improved management of foreign currencies by commercial banks to ensure fair distribution. He also called for more transparency in the allocation of foreign exchange and structural reforms across the economy to restore investor confidence, which is key for attracting both domestic and foreign capital. Ndikumana asserted, "It is high time to rectify the situation," noting the urgency of these changes. He further noted that some individuals benefit from the current system, stating, "Who doesn't know that there are high-ranking men who have done this business, thus fueling this illicit enrichment?" This statement shows the perception that systemic corruption is intertwined with the dual exchange rate regime, making reform not just an economic imperative but also a governance challenge.