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International Monetary Fund. African Dept.

1. Burundi is a post-conflict country with deep-rooted fragility (Selected Issues Paper, SIP). The country fell into a political and security crisis following late President Nkurunziza’s decision to run for a third term in 2015. Multidimensional fragility persists, with low capacity, sporadic violence, weak judicial and governance systems, high poverty and inequality, and vulnerability to natural disasters. Burundi’s 2018–27 development plan (Plan National de Dẻveloppement, PND), aims to address key weaknesses through export diversification, infrastructure development, improved access to social safety nets and public services, and better governance. President Ndayishimiye, representing the incumbent ruling party, won the May 2020 elections, succeeding Mr. Nkurunziza who passed away in June 2020, and took steps to reengage with the international community. Amid significant security improvements, the U.N. Security Council ended mandatory reporting on Burundi in 2020, the U.S. lifted in November 2021 the sanctions it imposed in 2015, and the E.U. removed sanctions under Article 96 of the EU-ACP partnership agreement in February 2022.

International Monetary Fund. African Dept.

Financial sector indicators appear healthy, especially given the recent economic downturn. Vulnerabilities, including on account of currency mismatches are low. While a sharp change in the official exchange rate may be disruptive for the trade sector, preliminary information does not show a systemic vulnerability in the financial sector. That said, despite the financial strength, longer term issues regarding the sector’s inability to ensure appropriate allocation of credit across sectors and segments of the population remains an area of concern.