WASHINGTON, April 22, 2015– The World Bank Group’s Board of Executive Directors approved today a US$22 million International Development Association (IDA)* grant for Burundi to strengthen the capacity of its government institutions in order to improve the country’s fiscal management.
Two major limitations in Burundi’s economy are small fiscal space and narrow export base. The tax to GDP ratio is at 12% with aid declining in percentage of GDP from 23% in 2010 to 13% in 2014, and exports concentrated in few products and services. Consequently, the country faces a number of challenges in creating the additional fiscal space required to promote growth and overcome the current fragility of its economy.
“Strengthening governance and management in the public sector will improve the delivery of key services and support government’s efforts to effectively implement public policies. These are essential for Burundi to sustain progress towards economic growth, poverty reduction, and shared prosperity, said Rachidi R. Radji, the World Bank Country Manager for Burundi.
This is an innovative operation that integrates technical expertise across Global Practices to deliver high-quality solutions and better serve the client needs. The Burundi Strengthening Institutional Capacity for Government Effectiveness Project will focus on developing the capacity of public sector institutions to deliver services and promote cross-cutting reforms that are aligned with Government priorities.. Specifically, the project will focus on four areas including: modernizing revenue policy and administration; strengthening public expenditure management and controls; improving the capacity of the National Institute of Statistics and Economic Studies (ISTEEBU) to produce timely statistics for policy making; and improving mining sector regulatory capacity and practices.
Strengthening revenue policy and administration will increase the effectiveness of domestic revenue mobilization, and create additional fiscal space to fight poverty through delivery of critical public services. The approved financing will also contribute to enhancements in the quality of public service delivery through a more strategic planning and budgeting process that effectively allocates resources to priority sectors. Similarly, the project will promote accountability by supporting more robust oversight of public finances. Improved production of high-quality and timely statistics will also foster accountability by enabling evidence-based decision making processes and facilitating citizens’ monitoring of public policies. Finally, the project’s support to strengthen transparency in strategic economic sectors such as mining will contribute to improve the business environment.
“Today’s project will help provide the resources and tools needed to improve Burundi’s financial management, support more strategic decision-making processes and boost the quality of public services delivered to its citizens,” said Marco Larizza, the World Bank’s Task Team Leader for the project.
The project, which benefited from close dialogue between the World Bank, the Government of Burundi and its development partners, “will act as a catalytic instrument to sustain progress on policy reforms supported by the Bank and other donors”, said his Excellency Tabu Abdallah Manirakiza, Burundi’s Minister of Finance and Economic Development Planning.
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 77 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change for 2.8 billion people, the majority of whom live on less than $2 a day. Since 1960, IDA has supported development work in 112 countries. Annual commitments have averaged about $18 billion over the last three years, with about 50 percent going to Africa.
