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AFRICAN DEVELOPM ENT FUND

PROJECT COM PLETION REPORT

ON THE STRUCTURAL ADJUSTMENT PROGM MME (1991-1993)

Loan N?s F/BUR/PAS/90/20 and F/BUR/PAS-SW PL/92/24

REPUBLIC OF BURUNDI

COUNTRY DEPARTM ENTCENTRAL REGION JUNE 1* 6

% . i'' #. 1 ' .

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TABLE OF CONTENTS

Pace

1

1

CURRENCY EQUIVALENTS, ABBREVIATIONS, BASJC DATA

INTRODUCTION

PROGRAM M E OBJECTIVES

1.

Il.

2. 1 General and Macroeconomic Objectives2.2 Programme Description

111. PROGM M ME FORM ULATION

11

2

23

4

46101 111

3.1 Programme Genesis3.2 Preparation, Appraisal, Negotiation and Approval

IV. PROGM M M E IM PLEM ENTATION

4. 1 Entry into Force and Start-up4.2 Implementation Schedule of the M easures4.3 Reporting and Audir4.4 Procurement of Goods and Sdrvices4.5 Sources of Vinancing and Disbursements

INSTITUTIONAL PERFORM ANCE

5. 1 Programme Preparation PhaseV itoring Mechanism '5.2 on

5.3 On-going Instimtional Support

V . 12

121213

14

141515

VI. ECONOM IC AND FINANCIAL PERFORM ANCE

6. 1 M acroeconom ic and Financial Results6.2 Sectoral Results

i Integration'6.3 Impact on Regiona

VII. SOCIAL RESULTS

VIII. SUSTAINABILITY OF THE PROGRAVMX'S ACHIEVEMENTS

IX . PERFORM ANCE OF THE BANK AND OTHER COFINANCIERS

16

16

17

1718

9. 1 Perform ance of the Bank9.2 Perform ance of the Other Cofinanciers

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k 'Y' ' 'l .jX. CONCLUSION S AND LESSONS i wt ) . jtt' :: l . .' 1* . :'':

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, . . j.ë10. 1 ' Conclusions 't ;lr . '.10

.2 I-essons , <..

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) .10.3 Recomm endatlons '.

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l . .. . ..j xj - t ;r ' -. 1 'NNEXES lA

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. l .. '1 M ap Of Burundi 7 '-

status ot- Implementation of the M atrix of- M.-eas. ures 'i

,1ë, .,' $',?)II

.'c Indicators P. ' '

ti,'l. 't111. Key Economl .. . -, .. 1; .. -;k7- ,.'ïIV

. Central Government Consolldated Op efations ' , '' .. .

. t .!V. Balance of Payments '

. ' )VI. Sources of Inform atlon for the Rèport k, , ,: ..j' j . '

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ADBADFAPEEASAPBRBCOOPECDMDM OECODIEPCPEPIM ABUGDPIDAlLOIM FONAPHAONCONIM AC

ONLOTRABUOTRACO

CURRENCY EOUIVALENTS

Currency Unit Btlrundi Franc (Fbu)

Appraisal Report

US$ 1FUA 1Fbu 1

Fhu 178.455Fbu 213.819US$ 0.0056

Completion Report (May 1996)

US$ 1UA 1Fbu 1

Fbu 284.491Fbu 412.530US$ 0.0035

ABBREVIATIONS

African Development BankAfrican Development FundAgence de promotion des échanges extérieursAmélioration des structures de l'administration publiqueBanque de Ia République du BurundiCoopérative d'ipargne et de créditDeutch M arkDépartement de la Main-d'oeuvreEntreprise de colnmerce et de distributionEconomic Prospects and Country ProgrammingEtablissement public d'Importation de matériel dtl BurundiGross Domestic ProductInternational Development AssoçiatesInternational u bour OrganizationInternational M onetary FundOffice national pharmaceutiqueOffice national du comm erceOftice national d'importation et de colnmercialisation des matériau: dèconstructionOffice national du logem entOffice des transports du BurundiOftice des transports en com mun

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BASIC PROGRAMV E DATA

1. l-oan NOs:1st Loan (initiàl)2nd Loan tsupplimentary)

2. Borrower3. Guarantor4. Beneficiary5. Executing Agency

F/BUW PAS/90/20F/BUR/PAS-SUPPL/92/24

Government Df BunmdiGovelmment of BunmdiGovernment of BunmdiComité Interministéliel de Suivi du tprogramme''d'Ajustement Structurel, assisted by a PermanehtSecretariat and a Teèhnical Committee.

A. LOANS1st Loan

1. Amount2. Service Charge3. Repayment Period4. Grace Period5. Date of Negotiation6. Date of Approval7. Date of Signature8. Date of Effectiveness

2nd Loan1. Amount2. Service Charge3. Repayment Period4. Grace Periöd'5. Date of Negotiation6. Date of Approval7. Date of Signature8. Date of Effectiveness

B. PROGM M M E DATA

1. Total Cost2. Financing Plan

ADFIDAJapanFederal GennanySaudi Arabia

3. Date of 1st Disbursement4. Date of l-ast Disbursemçnt

US$ 10.592 million,0.75%40 years10 years3 to 4/10/9030/10/9026/11/9024/05/91

UA 7.829 million0.75%40 years10 years(3 to 4/ 10/90: supplemenlry loan)18/06/9109/01/9227/05/92

ESTIMATE

N.A

UA 18.421 M .SDR 64.9 M .Yen 2400 M .DM 10 M .Riyals 11 M .January 1991December 1992

ACTUAL

UA 18.421 M .SDR 64.9 'M .Yen 24* M .DM 10 M .Riyals 11 M .05/06/9112/03/93

C. PERFORM ANCE INDICATORS

1.2.

Overnms/Residueb. elay compàred with timetable

Nil) 'h'.

. Delây in effectiveness; 4 monthsl mg ln co. mplytioprdate Nil- .

% I mg in last disbutasem. ent 2 m, onths'

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1.

1. 1 The Strucmral Adjustment Programme (SAP), financed by the two AfricanDevelopment Fund (ADF) loans over the period 1991-1993, was within the framework ofthe pursuit and strengthening of 4he reform programme embarked upon by the Governmentin 1986, and supported by several donors including the Bretton W oods lnstitutions. TheADF had to participate at the end of the second phase of this programme and initiate thefollowing stage.

INTRODUCTION

1.2 The first two phases of the adjustmeht programme supported by two W orldBank credits obtained moderate results. The post evaluation carrièd out by the W orld Bankconcluded that the reform measures had a limited impact in .respect pf rationalization .ofpublic enterprises, public entem rises reform , liberalization of prices and imports, prom otionof exports and agricultural policy. The main causes are: lack of com mitment and politicalinstability; the complex and grandiose conception of the programme, especially regarding thepublic enterprises refonn, and immoderate conditionalities', inadequate links between ,them acroeconomic reform and the m icroeconomic and sectoral policies; the external shocks(price of petrol and coffee).

1.3 The evaluation of the first two phases had shown persistent budgetary andexternal imbalances and a further l0w growth. Faced .with this situation, the Governm ent had

promised to pursue and strengthen the structural adjustment progtamme.

1.4 This report was prepared on the basis of the appraisal report and tkePresident's memorandum, supervision and audit reports, periodic implementation reports ofthe SAP M onitoring Comm ittee, various documents and correspondence relating to the SAP,as well as infonnation gathered by the SAP completion report preparation m ission.

II.

2.1

2. 1. 1 The objective of the Bunmdi stnzctural adjustment programme was on the onehand, to improve the short-term financial imbalances, and on the other hapd, initiatestructural changes required to ensure medium and longrterm growth.

PROGRAM M E OK Y CTB X S

General and M acroeconomic Obiectives

2. 1.2 The objectives of the programme financed by ADF were stipulated as follows:(i) achieve sustained per capita jross domestic product (GDP) growth: (ii) improve thesituation of the balance of payments in accordance with the objective of reducing the debtservice ratio from 46% in 1989 to 32% in 1992 and increase gross oftkial reserves to a levelequivalent to four months of the importation of non-factor goods and services; (iii) reducethe budget deficit to 5% of GDP in 1993.

2.2 Program m e Description

2.2. 1 To achieve these objectives, the Govemment had to pursue the structuralreform programme and the financial stabilization programme in the following areas: i)macro-economic management; ii) trade and industrial policy; iii) management of publicexpenditures; iv) reform of public enteprises; v) agriculture; vi) employment policy; and vii)social policy.

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>4*+

3. 1.3 The policies implemented helped the economy to record a slight recovery of2. 1 % per year on average over the period 1986-1989, less than the demographic growth by3% a year. The balance of payments and public finaflce situation remained disquieting.Faced with persistent disequilibria and low growth, the Governm ent was com mitted to

pursuing and strengthening the Struçtural Adjustment Programme measures.

3. 1.4 Given that the World Barlk had programmed a third strtlctural adjustjllcnt'credit to m ake up the financing detk it of 1992, the ADF Ioans were earmarked to meet l l 'needs of 1991 , and assist the Government to implement its Structural Adjustment Programn) 'scheduled for the period 1991-1992. The ADF was, in fact; , to participatè in the last phascof the second Ioan (SAC II) and initiate the nekt stage of the SAP.

3. 1.5 At the request of the Govem ment, and in coordination with the W orld Bank,the ADF introduced a programme which would cover the period 1991-1992, and provide alink between the second and the third phase of the SAP. Dtie to inadequate ADF-Vcom mitment capacity. the programme was financed by two Ioans, the conditions ofdisbursement of the second tranche of the initial loan which are the same as those of thesupplementary loan. They involved the first two structural adjustment loans granted by theADF to Burundi.

3.2 Preparation. Appraisal. Neaotiation and Approval

3.2. 1 There was no preparation phase of the SAP. The Bank Group did notparticipate in the first two structural adjusiment credits of the W orld Bank. Nevertheless,contacts were made with the Bunmdi Authorities and the W orld Bank, notably within theframework of the Bank's subsequent m issions to Burundi: prepération of the report on theEconom ic Prospects and Country Prograrnming in Februal'y 19872 general identification anddonors' Round Table in April 1989. The contacts led the Bank to include a structuraladjustment loan in the programme proposed for the period 1988-1990.

3.2.2 In response to an official request of the Government, a Bank appraisal missionvisited Burundi from 24 April to 9 M ay 1990. The mission worked in collaboration with theW orld Bank to draw up the Strucmral Adjustment Programme financed by the Bank.

3.2.3 Negotiations for the ADF loan were held on 3 and 4 October, 1990, at theheadquarters of the Bank. During the negotiations, the Burundian delegation made tworequests: increase the ADF loan from UA 13.815 million to UA 18.421 or 23.025 m illion;and raise the ceiling of UA 2.763 m illion fixed for imports of petroleum products. The Bankdelegation prom ised to review the allocations available under the ADF-V and, if possible,consider the request of the Burundiap delegation. Some minor amendm ents were also m adeto some of the term s and conditions. '

3.2.4 n e ADF contribution which stood at UA 13.815 m illion in the appraisalreport. was increased to UA 18.421 m illion following the request of the Governm ent duringthe negotiations. The Board of Directors approved on 30 October, 1990 , a loan ofUA 10.591 million, in order to respect the ceiling for the utilization of the ADF-V resourcesfor the financing of Ioans in support of the reform s. The Board of Directors subsequentlyapproved on 18 June, 1991, a supplementary Ioan of UA 7.828 m illion on the ADF-W resoumes.

N

W . PROGRAMME IMJU My#TATJOV

Entry into l'orce and Stari. upt.iI

- .

; .. . . k4..1. 1 The general and .jpecial conditipns w.ere fulfilled by the b orröFer, e'xççpt the

' . ' . jy' .. . . . ( r . . N j ' . ' ' . . . ' . IjijlL . ,second condition of the first tranche and the tj'tktçonditioù of th. v second t/anche rqlitij)g to

' ? ïfhe apd public expeàditute p' rogra '*m' t intothç iflkgration of the public investment prog'vym ; , .. jth8 bttdgçt, as well 'as the eleventh cbpdition: elf.. th e seèond 'ttanche, .çohcç/ntlng thk'

' k; . . #' '

. ' jty r ' ' i' ': $7 ' 15 ' .''ejtabllshment of a single window for the export fanpélities. .t) y

.)

()

Conditions for the Effdctiveness-nffhe First Loanl

. $

4. 1.2 . The entry into forcc of the Loan Agyeement And (ikshvrsement çf jthe first! .' ' .. j; j;trahche were subject to the fulfillment by the bortowtr, pf the folloWing condi. tionsi

. ) .. .

.

.,-. t

'

.. - . . ; ;..(,) ..;j j

'

.

Evidence of the opening' 'ef a Speçial accopnt Wkh. à com. m.: gtçlét béhk.

.. ) .; : .t: ; tj ,abroad to receive aqyanqg paymènt. on, tàe toàu. t.ö finirkè tligibte. . . . i. .: . ) . y.

impou expenditures.; thve. soecial account was ènerkil. on 26/..z/1.9. ,-1. a.'t h'. - ' ,1 - : - 1 - ' - ' - . zt'sthe Banque de Bruxelles I mmbert in Belgiàn francs ué.dey tlte N'

301-0094175-69-000., j

'

ttlré's programmk le (.p à' p)2. Evidence that thç part of tàe jublic expendi

,' . ; ij ik . ,t;,jjrjg, tj-scorresponding to 1991 was inclqded in thç generat bpdg:tqux. . v

y . j . uinclusion could nat be carjied out for the 1991 b: qdgçt, duK.to. .ih,é delq'y. ... . . ' , ; .t . F . 4 . . .in the preparation of the PEP. .However, AD# Was flex.l#lé n order

..z ) k; ' . . . . ..; ; . . , ,not to delay the release of tlw first tranche. , .

t

4.

Evidence of the adoption ?)f a new nomenclàiurecapital expendilre: cf. dècreeclaw of 31 Decjmber,

r ' '

l vfor operâtilk, and1 9 :90 ; ' l

p'

kjj. uk s k, ryEvidence that the qyqatiopal cçiling of thé cè.m m. ercial..u , at. j. . .- , , : j j .-; jranting import licenèes way tailed. from .B'U# 10 m'illion to, tiiy 2 5V l -' C 1- ? . .' ' '

million'. cf. deciîipn oif BkB of 4 October, 1990î ',iI

' ices in .accpvdpnl ce WithEvidence of a review .of petrpleum product prj ; , 1

'he' on-going studiesf c'f. hM inlsterlfgt 0 rdèr ofthe conclusions 'of t . , ., .

. . f t ; . . . , j14 September

, 1990.,

6.

8.

,

'

!, . ' j

Evidence of the adoption of thçt/tgislation appllying the prèfer k*ft, tiiâvl tax: ' s. r ) :- l - :. ..... 1system on exporters' profits: cf . d.ecreç-law of 3 Octobèr 1.9,. .'8à;-

. ; ij - , .. ' , . jj, q.. jjjjzjyyjug

,

:

Evidence of the teduction in the Iiumber of steps iffvolved!. . f .a trader's licence to simpl: mg

ristration in the Regj.ster , tjf C (b, mttiqjqce

itiellt' èf' Ministerial Orl der pf. 15/10/1f990'';and with the tax author . ..

.. ) .

. '

.k.j ,t/submission of ths âofixb;n ptrogramme on civil kerkice refcrN. to the. b

. .

. J 7 )' ; jjjjj; o j; sj j y' jtjjity t yojyj UU.Fund for approval. th: actien prograrilme for- .

, , . . . . j, j .was written down in' a letter on civil service devélojnlmn.t p ellcys in.

' . ' . . !

'

keeping with the oblectives of the SAP; ;

9. Submission of a globai reform policy for the State enterprises sectorto the Fund for approval: cf . the policy of approach which is found inthe public entem rises sectoral reform policy adopted by theGovernment of Burundi in January 1991;

10. Submission for ADF approval of the program me of actions for thepublic enterprises reform considered acceptable to the Fund: the publicsector reform policy comprises a program me of actions for the reformof public enterprises;

11. Evidence of the liberalization of the private sector recruitm ent system :cf. M inisterial Order of 12/02/1991.

Conditions for the disbursement of the second tranche of the first loan. for tkeeffectiveness and disbursement of the supplementary loan

The Government had to:

1.

4.1.3

prepare and adopt procedures for including public investments in the1992 general budget and submit them to the Fund: cf. the 1992-1994PIP and the 1992 budget, but the inclusion is not com plete and the newprogramm ing tool is not yet mastered;

adopt the statutory and implem entation texts concerning thesimplification of procedures for the establishment of companies: cf.decree-law of 20/7/91,.

subm it to ADF for opinion the conclusions of the study on the enzrgysector: cf. the study transm itted by the Government;

2.

4. start to implement the programme of actions for the civil serviyrreform: cf . decree of 11/7/91 setting up the Advisqry Commjttèe ,@,fiê .'.the Bureau for the improvement of government strucmres (ASAP);

embark on the liquidation according to the programme of actions andàI for public enterprises reforml cf. the legislation on thèthe timeta e

winding up and liquidation of the Club du taac and H olding Arabelibyo-burundais (HALB) in August 1991;

embark on the divestitur: procedure accordihg to the programme ofactions and the public entem rises refonn timetable: cf. the decrees onthe appointment of the members of the PE Technical EvaluationComm ittee; '

cornmence the rehabilitation programtne according to the program m eof actions and the public enterprises reform timetable: cf. theperformance contracts concluded between the State and OTRACO andVERRUNDI and SOSUM O plan of action;

6.

7.

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. ho

$

7 ' $1I . .:.'

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. '

j) y jjj .. .'1 . , -.:I l z 3 1. . ,.

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. -, . . . , . t. jetter lot- u,.e M. k1,. istefr . tf- ' , '''., .textlle prod ucts and g-.,l$4&& lbx-i,ttles . c. . , , , .

..l '. . . c ! . j . ' t ' kdCom merce to tvhe Govetxbr o'f.ttk ë B , ; , ' , .@

k.. . ; :.: , s

' .

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. e * , . . uxâ 1 ' 2 . ' 'extend the llbetâllzàtlon of the 'recrultment ojcy, s.t'v.vm ln the paaràketdtâ'l ' ',,'-' '', . . . jjy. y ... jg J . ' #, qlEqs.r ' ' ,

' ' '' ' ' r t, '

sector: cf. decree-law r*f 4/11/91 m' ödlfy. mg ,I.h? e lràbour codd; , .j .. . . jr! ' 2 -. .

. j . y .' def 1- ne the principles , obj.ecti vés ynd criteria. of thç söcial polilcy4klk 'd' çr ,

.

'

:'t10. . . - .

structural adjustment and ''..su b mïitt them. to AD.F : cf. D ,eve.'l4/j' m èdt'! l v. . . .. , . . ! j . .) . s -. . - , .Policy Statem ent wh ich compri s:. s a part on tk'e S ocial D 1<. . :n' s.llm ef t'1 ' e' .t 'S tnlctu'ral Adl,':u. tstmekt; .' ; u '

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' ..; 0,,...- Th e aforementlonedr meaettçes . wtïe tAkeo, Iilt > . 's .p','art Qf. , th .e. ;. jjtrl,k t. b tld. g'qv-htslp, ,(') tqyi , . . : . ,. .:. . : k . . . . . : . : tj .v t-e. d,. , t o. m, e ryit , . an'd-l p f ti' m' '(j' 'iltifn'u'' ' T kâx. ; ' '. . .b.?If1iF I k9,'z9.v2-4xtjg1ta.py.. . 'l'nc. rease ln the clv41- ,fer. cvjlc' e wasvvr. es--rttq .- . ,.. . . y ,. ,., . ,. . . ,.. ..p .,, :. ,.., dr . . . . .' i : s' ' ; . .. : . , 7 42 ' 'z/ ' . . . o ' . 5 4 g / j' j g r:. ,?j. g . tj yN.... js', $ $ y? yywyljj j . g. g. j q j tjjz Ni. jjj' ' lky . u' y j jyjj. kstjj.y #Y-, jj j.# ' , . ' ' t (. . , ;$ %' .. è-clihp, t'Ibn. .s .w .e1a e l lmlted (.c f . letter n. . - . : , , . . , . , -t; . , ..: 4). ,,. #,. y 4. , .,!,,, .JSI '. ' v' - .. d ' ' . . ' '' 3 . ' : . ) . p .z . x . . . x . . r.r!- x.. j . , w. j . . . 4. . a v. zo r. x.jjj xqy m > #a j. è ay, . . àu, ys ua ,, avgja tLç f o : m. a x 1* jt'iœ 'tj. iljjj 7 tj V' 1 1 0k U QI ' tl hxl G'! ' li wll k . . : ; ' .F' 11tl, à j) qe ) ... .. zj. . - p e p O l 1 C y O 1. l 1 m. l t 1 n s t v w w' ' ' t t.,-u w,n' ' . <. <, 'w. a. .u w .v., J. w .-.- . . - - . .. . . - . ..4. . y . . ... ...y . . . . .sx 4, ., qy ,,y - . . k. k j y y . j ,. . . yv; 'j%. ' s. . .LJ.. j x;w o? 4 ' : lw u u d 1. e $) . . xj'tug 'roA

. rs4tp-s-liliés. ) w,,ak : c a'rri ed ' out . T' 'he Go*eratn' . - ' eiitt yxdi iu'.q,:' ..uldtlde-utTt/azc.-t. 'su. ib .$lld..g.e'!: ,4o pxbpl 1e. y e. nlftp' y 1 se ,y , .. ., . . .. s 4,-' c . . , . . . .ï . ' , 6 -x,,z . . q . ' . , . ' ; . j-r fs ,. j l , ; u. zj 2,. tj '. '.oojjjj, j; jv , , ' . s. , y ). ., . . . , . ' -N ; *Ve , : . :-l&s. ,*, .'the lm pact of the m easures w as 11>.. . lted' ' 9GJ) klew o . 1na eq, e../ , ,# (i+, , , . .

: .z ' n .4'7 #Lk...# w .K

'

,: .' .' j . ) j . j ;. '* ..' .Qutfedt' e-ppî ottd lture . . ' , '# . !.. . ; . ljk. ?. ,, ,

. j. . .kI . : . .). T . y

. , ! ; L1j . . . . .

f . : '4: .. L*

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j .. . . ajjj, . .!. .j .' (

G .. . , : t11

d ' &' 'jll 'j

. . 4 . , j .a< . s ..u A . ' l,u. . .>' -, *.7 x.2U 2.,.1. V 1'.4 . ; . 2. .i>*. ' x: gL,<.... - . k:x A.- .% ...> Aa; . -''< ' u% < 4ur G*h''e ' .w . J e c ' rA wa. * . ' Q* < - ' ' *

4.2.5 Some reforms helped to improve the management of public resources. Theyinvolve notably: i) classification and centralization of aI1 public funds in the ''State GeneralBudget'' started in 1990 which led to the presentation of the test budjet for 1991 and theconsolidated budget for 1992; ii) the establishment of PIP-PEP units ln the various jectorministries (Roads, Health, Fzucation, Ajriculture, Transport, Energy and Mines, RuralDevelopment) in 1992; iii) implementatlon of 4he State accounting plan in 1992,. iv)budgeting of counterpart funds (1991 and 1992) for the Stabex fund.

4.2.6 The measures for strengthening the recovery of revenues and tax arrears wel'()pursued. They involve, notably, the computerization of the operations of the tax services i!1order to improve tax collection and obtain better information on the tax base and thecomputerization of customs operations to'enhance recovery and customs staiistics (in January1993). Similarly, a campaign was launched in July 1991 in the Tax Department with the aimof accelerating tax collection.

4.2.7 ln 1992, a complete reform of the exchange rate management system wascarried out in order to create a real econom ic policy tool. Since then, the exchange rate hasbeen automatically adjusted by the BRB according to the trend of the economic parameters.n e flexible exchange rate policy has made it possible to m aintain the exchange rate at acompetitive level.

B. Trade and Industrial Policy

4.2.8 Programmed reform s should improve the incentive arrangem ent, promoteexports, liberalize imports and simplify the procedures for exports and enterprise creation.The ten (10) measures planned were implemented on schedule.

4.2.9 The aforementioned incentive measures and policies weie adopted to createan enabling environment for the promotion of non-traditional exports, and investments. The

. '

drawback mechanisms were improved signitk antly in 1991. A preferential system oftaxation of profits on non-traditional exports products was adopted in 1991. To that wereadded the authorization in 1992 of the retention of 30% by exporters of non-traditionalproducts of their foreign exchange earnings, the easing in 1991 of the adm inistrativeprocedures prior to the establishment of enterprises and. more particularly, to the profession

. of exporter, tax exemption on iransactions relating to agriculmral inputs and Iivestockrequirements (Ministerial Order NO 540/298 pf 11/06/1993), the power given to the banksand financial institutions to deduct provisions for bad and disputed debts from taxable protits(Decree-law no 1/013 of 23/02/1993), and the adoption in 1992 of a law on free entemrisewhich comprises a range of incentives.

4.2. 10 Significant progress has been made in the area of import liberalization: i) thevalue of import licences which the commercial banks ean grant without the priorauthorization of BRB, was increased to BUF 25 million in 1990; ii) authorization was alsogiven to the commercial banks in the interior of the country to validate import licences forindividual transactions not exceeding BUF 10 million. These reforms were com pleted in 1992by the adoption of an open, generalized systeï of granting of import and export Iicences.

- 8. .

'

t k .;4.2. 1 1 The measures for the .simplifjqation of expqrt. 'gndr, enterprijje erèatio.n'. ' . : ' -'pttkëdbtes were implemented, exce.pt for t he çstvgbtlishment o.f a siiinglé. wjndti)p .f.or 'exjort. . . . ! . .t$fortnàlities

. W ithin the framework of txp. 417t promotion, the enp'liprisç refotnp everclseiuvqtye'. i) puthof iza.tion to exporters. of lmn-trkaditiqpal prpducts ard to B. .llBlënd'i.à4: 4 rosidehti

' ''

'

t BI-I.F (24 Nptv' ember, 1991 ),n' ii) deduçtisilifyz' ftom 'theàb. rèàd to open aècùtlnts in convettiblt . ,: . .

tak bése of export costs up to 10. % of turnoket realized o:z exports (çf . Ordqçpf' 14/ 2/199'1)..J ' ' ' 1 ?'Viii) thè reduction to 50% of the rate of tax on export profits (cf

. Dectree-Law of 1::3/,(1)2/19903:.

g. j! . r .iv) real estate tax exemption for authorize,d ent.èim rilses in the freëjzone and t#n ( è0) yeat's, : . . .! r F : d ( .: .. tta: exèmption on profits and the applkation of

, tbi raté of 1à % bpyb' nd t:is q' eried' ; y). . . : . ç. 4. . . j.

èttjtbrfls duties and service tax exemptipp gganted. to enterbrlsrs .which are undg, tht free' *'' .2 '. ' '''''' . . *' J ' ) ' ! t ' ' lztiile jystem (cf. Decree-Law of 31/08/1992 apd'. the,order a()f .2é. :(0..9,/)99,2).

q :'

C . . k . 'Public Extenditure Manacement

. ; r

4.2.12' The four (4) measures' *. h ich the Goyernment shpuld tpk. e ip lthjï. a'reaC érlïed the budgetary reform and the qiyjl seryiçe ureformf The jeaj. um' #.W' .:t.ç.4ilk*è,nl withconç, , . , . !r

fq-jtjddy jo tàe drawing up and implemeniatiory pf a programme of aJl. ipnj! tfpr tlpyk. iv.ll lervice.. .,

. ? . j . .yj.k. uyjjjje' d ,tmd. j et jjav:'WIJ ikW budget procramminc instnzments- such aj, the PEP an t ,. ; . k , C :. G . ''''- '* '*''''' '' 'h'''' ' i s # ' 1 ;

beèh iùtroduced but not yet mastered. Jj

11992. Thè ,ctlul utelrpatt4.2.11 A unified budget was adojptçd fgr the first time in qtted for in 1991 and in t992. Tkd U'' qkltfltmél:tfttnds

, hotably the STABEX Fund, were bud l'. l . . :1

*

wgs also mow concerned ir 1992 with the conjblidAtion of new mânggemeht ingti-uttloht: and. !

ptibliè fejources projramming (PIP/PEP). k:

. - l4

,2.14 The civil service refbnn exercise has been implemented with the sppp. ert oft 19'91 s'oniè siriktngthè B

, ttrpâu - ASAP (Civil Service Structtiarj, Itproyement) set up n . :. . . . ,

j .fagts cöncerning this reform exercise inyolve tùe preparatitm ef thç ipveptqlj' of the. .. .

j. ( .) . . .abih. ihljt. rativè structures, employmentanl stvff streijgth. This inventej ry crénstittl. tespp :relkiààleE . , . . 4:1 . , .kâtâ base for th4 officers in chatje qf personnel managemept. Similqrly, g. lpatmyl (jtl th' e

' d he 'Interhàtional Labour () rganfipfipip (l'tOj wasdlâssitkAtion of employménts base o.n t . . , .

prèpàfed.'*'. ' r j

. la

4.2. 15 A 1991-1993 PEP was prepared by the administrgtive sesr.vicej,' bul' it cokld'A . ' O ''' ..1 '' . .* 1 . ' i

. '' >' ' ).rot fileêt the time-limlt to be usetully utilized ip prkparing the 1911 tkdaitr- IhetGokernlà. - -vtït( ' . ' ' ' ' X 1 ' 1- ' '''- ' ' # 1 ' iâdopteë â revised PIP for 1992- 1994 , ahd set p p ui'tl M'ay 1.992 an iptettntljstmrirgt'c xommittee'e' j: j plijlkfie for supèrvising the PIé p. roçkjs. # veyevtkeless, the -)$99j-1 991 'PIP ljwaj uot1- . - , . . ; . y. .''r . :! .

-àlscusséd with the donors due notably to the politicat situatibn (pre-elz. ctlon periodl.prêtiàilin'gat that time. I

kD . Pubtic Entep rises Refonp

( . u r,

4.2. 16 The seven (7) measures required were taken, but in th e absence. bf ,akfl i:itiali - - % . ' i . ' ' ' 1' ''sthetklple, the time lag could not be assessed by tli. en. A public çnterprl, je$ wfonù, ( p-,ljlley. was

, . k. yktq yjses r(' jkdEp) wasadqtged by the Government in 1990, gnd. . a Department of Public phed. The approach hinged on thrkè bases, namely: i) reltâbiliiatioh df 'tdtraiègi'cestéblllises; ii) liquidation of enterprises which weTe neither sfrategié nor profitabldj az ' iii)enterpt 1 i lt dhö

' tlltd 'beprikatization of non strategic, profitable or potentially profitable tellterpr ses. :1 f data Un' tilse publtcnoted âlso that some progress was made in the arza of the collectijn o ,

tèrprises. 1en)q

. y't

. . - ' '. ' . ' t ' ' ': ' '% '' '. x z

'x..x1- ..u. ...s.a..ux .-. z . ..-.. .u.œ . x .. s...t,. ...xu-=.aA ' . œ' '. A . .' - .

. (k+- $ .

. %'

. x . p .k . <, gNè

Y * N '+ . VU!' * l'k 7 ' $ wt., ' '. .ê W '. e. 14:. .: I

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1 .

- 9 -

4.2. 17 Concerning the rehabilitation work, in 1992, two performance cpntracts werenegotiated and concluded between the State and two enterprises. These weré tàe' OTRACO

t(transport) and OTB (tea) contracts. !l

4.2. 18 Liquidations were not many. W ith regard to privatization, the transfer ofoperations from the State to the private sector became effective in 1992, covering five small

i

'

enterprises.

E. Acricultural Policv

4.2. 19 The two measures to be taken in this area which involved the drawtng up ofa policy for coffee and fertilizers were taken before the second tranche was disbursed.Under this policy, the Government took measures such as the txemption of tax Untransactions relating to agricultural inputs and livestock breeding as well as equipmentexclusively for agriculmre and animal husbandry; the liberalization of the coffee marketingas from 1992. .

4.2.20 As part of strengthening the efficiency of the coffee industry, the coffee taxwas reviewed by the introduction of an ad valorem export duty in 1992,. the system ofauction applicable to exported coffee, which places the public sector and the private sectorin competition under equitable conditions, was initiated in 1992,' the coffee industry was .restructured in 1992 in order to separate the production activities from those Pf marketing.

4.2.21 The restnlcturing of the coffee industry has initiated an opening to the privatesector which rem ained restricted. In fact, given the key role of the coffee industry in theBurundian economy, the Government's strategy was aimed at preserving the effectiveness ofthe existing structures in order to maxim ize profits on investments authorized so as toincrease production and im prove quality, particularly the elim ination of the taste of potatoand competitivity of coffee on the world market.

F. Labour Policy

4.2.22 The four (4) measures to be taken in this area, which involved liberalizing thesystem of recruitment, strengthening the departments of the M inistry of Labour and inconducting a study on health insurance, were carried out. But the lack of a timetable andthe complexity of the measures did not mak: it possible to assess the extent of execution.They were mainly reflected by the authority given to employers to freely negotiate the wagesof various professional categories, with the exception of the minimum guaranteed wage for 'non-skilled labour.

Social Policv

4.2.23 The two measures to be taken, which cohcerned drawing up a social policy

within the framework of the adjustment and a programme of actions focused on povertyalleviation, were carrird out. The Government's Developmeht Policy Declaration includeda part on thel.social dimension of adjustment and the poverty alleviation progranzme.

P , . ï 7 '<*< : N . ! . ., y r . <.

- 1 0. -

oA % ' a , . . '. ' 4 . .r . j t j; f . : v' %' . .k$j.:l .-.233' 'z-:?q$,.-.krj.?- -- rql-'q 7,1-1,' tF!. . j-l (?j- 1rs 1-.th, (-1! ,1. ,.41).-. (;).- 11 -. 11. (E)' (E)? h-'l4 (r! (-j ikkrdsd-lk--tël t-I; 1-1-.. ,kl.-... tk1k1-; (;r--.-- htbtlkpkp-lrtk-t!j t3ài. .. !),1r-!).J. '1g:71 i.r slrt-:le :)jj!j.ëEj* . j;)g)y' (zj---:lgjl)l t;)F;. .j1--(2),t 1j.jkjL-'#jp'-i@--,I)k j(- jrlllr t'.r-.t)lr)t-p lstj:i -.. -! ,. u. ''jr . L '!: . . !: . . . ' . , ' p (). . i ',à' im. me w 1. t ne s s e d t'h,' t 't1'lm' ,p1 ; '3-:11* n. ta/tö'- tf .t4 f?' fl''tli ? t Ve-'r ''# -u'f+.s ,ti kf' b', O ' .3* ' 7/0-6 iS, trtl.. c, tt't' . lt.éfl Az ..d.;.jt1 stm e tlt r g. . . , - .;+ . .- . . ,

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- f - ' ;' 'êahd wds re' *-t1., ge. c t'e- d by' 'th e 'f'u; ' lf4' 1 'ment of ''th' : èb.Un:-''dGtï'l'et1#1o':.Lp.s (Flf' t'.t4- -: 'f*jllgi*'tX*L ' Ch. ' ' l'fl J 'i' 2 V /'iX931- r' l ' 5. h. jc j j papc. e. y . y. : . y .,t.l.t1n ' e hV . . . .... . . , j. ..-. . . - - . j. .. .r . . . ..-. -. j.. -,-.y .y. . s .y. . . .% . . . . ' y . ' .y ..!x y ..( g - . , ,yw . . . . . j s . p ( . . jjy yg yu, .sc. kg q , 4 .w 4 .&j xjj; j. . j ; s. za: uyj. s :. q w j : s. , r . ,.$ . . a - ; ; . : , y :, jj, pjyzj j ywjwtj u ,je. ayju j

.y . j), j.j jjsjsjljjz < js u.js1. ns. . tedd. t.), ,f' .J.hé-intl à 1-y. 1 9 9 1 , th .ttt l s , f t#. e m ' ('m th' $ - . - . . , v - . k . ., . ,:, . j . , .;..y.;aw.. ., , ., . , y. u...uw. ' ; . ' ' . $ . k ' . . . =1 . *9 :9' 1* - l :. .à4. e' Y''d o 'f S e. . p: t e hzo b e- -t' ' 1 9 9: 1 , t h' ' a t 1 s , 4 1 g' h. t 'mc e' ff- st h'A s b ' e h ) 1 u' 'd 'ms edhl' -. ë-

'd 3u l 'k . , T1 1: ; h.i- e. S . ; t'm e, ttl.t ra. J?h , +/.< >x lx..,75 u iuzi- - - - j- . u. jw e d, ; b y A , o. y e' jj : àv'. . .e. ) p l-pay, .,we-d r i p, ', 1 v (/ta'ï I , r, ''id 1.% :' b' Y'e t-w2 e-' -:' p. 'thj 'e. j' -'d#X(, rli d, ?=#-7a.!p dA.d 1, uslmeqt l/ r,r(5.R.. lram. ' 'm e g l.n , - , - . . , . - - .

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k

4.2' .25 The mojt rematk. ab lt suceej.: was'. athl .. : .., .

Q - - 11' d 1 'h th e 1 m p' t. ()'#e'. m' ' è. n t of 1 nst l'fttt' 't 170: n-, .al âhdt. kila. ' '

tu, Xr flliyry' a.:, j '.a . --T k'. h' e-s'y' . 'Xa #' e' '. qlfoWta3b' ?'.sl''1 ' llths''--: iSCC-tUC , a . . . . - , u , . : ;.. . .

w' * ' ' ''- <?-j '4- 7 tf a fl- ,e x' . jb: : 1 pe *: x ch ailtg e-. . rafe. p (-) 1' lty-s ' ' '' ..1';-n$ Y'-*d i #.k.'m' ' *n7 t ' '0' f ' ' ilidf '2li*''Q*' 'çl' '15 5 zW' - ' %-'ma. '.ln. . ia tnlnc- t) , . -. . , t-ap. . . . s. t-rxla ln...#*qkl. ygs. ,

' ex o $ ' .1 ' ? rjj-k-. ' . j. ' j m p o ta , s im . p 1. ,i 'f 1 c at: I'b n t) 'f ' e x p' 'o 14:2-. ' k*. ro' 't' -evd>'' 'blre-' s a nd ' ' 'b.' n' . t . eqb . X't ?sc 'e'- 1 1c' ' ire- at'l o 1t1. ''' .-a''ttt *7d t 't h Jlilb erà

,,ql#zé . o1,1 ('d r . , . p, . . . . .- - '. .' , .%rln'' ' rove, mt-à-t 'o. f' ' e ff iciency ' in th e coffee sector. ' %l p . -

r . . . . .. R '# ' ! . . . .. . .) '(

'

. . . . t f. $. '. u * * * f .i.4 .2 .. , 2 6 Nevertheless , the prog. ram' 'm'e h, as not ao. .h.' 4.e. ve d lt,s ob ' J :c. ''tlx@ws lr), tht ei q#- ea oflqmXb..

'

tekem-e. at. U' !f. o' u'bl lc rejottlices ma'tj ag' -ëm :nt . Sqc-u. !rl.rt.. ,y. e. x. p ,é1!1. -.-. . . . , gy, . -t., . y,- e'-. içytbv . ,- zjk4 r' 'r .s . ; L à .,x .# - .' , g . k. . (j s : yvj. k e s aui d' w etl' C:al

.r' : e' W ''Lkei' t, 'j.t' -1 1-(1 ,1Yklil.a df ' 'e .-q tl' Fatt$' ' 1 T ' h! ' ''e hpr koltt Olng' h'lhhlWhille' edp' e

ah. .d,li it.ttre. Un g.ljods an ., . . . ujs ; z . , . : -. . ..k-. - , ;$ a u-j- .--. . k, c . . ;. - . . , ,. s . . ; .. :(. ru,rj).: jus s u ciht, a s j ' ttb' . !1i; :' '1 1% 2 v,- ë-4 t''m' è-11 'f ' p ' r (-j -g. ?'#- l J 118fl!- . f'Iin'' î *e*s' )' ' - '.al' i'n' d) , ip' tl b! ailq e' 'P?I. ac e, o' f p, .t0- g . ra'.1H'' mf ng ln$ . .. . . . , . a .... . ... . . , r . . .

. ' . , l.k y4./ *u3 , - y à ' : , , , . . . 4 gp, ./, ,p: s,- cyp, ) jj. u s jufjk. t. z. d,*: ft. o m w@' a,f dk' i n s ti tu ' lt 1' o n31 ' ù ap a. c' l ty ' yhd' 1 tfh'' ''l'ç fo', 1--1eàèbendftk' i !rë.- p roet:mm. e s (P.I. . , . . .. ..; ' o . . . .fnkolkeme. p. t of the sectoral m lnlstrles. '

''' . j. .

' t #, . . . . t .. .1 z - .4 1 ' ' 2 '# S i'mi l arly t he p ubl 1 c enterp- . rikgk. s l'efto ' ,.n'n afld', so' e 1 a.l d' lrmç.. hsil'zo''n 'oz'f 'addj titjtmàhtr@ - @. y < . . ' . . . . v .w

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. y y ,. ylg y'-u. . . t.- J. : ' . .j)' .. z , . ,xt,,jj, v. . G. ov e t.jj.m. . :. ut' b . ut th e - s u c c e ss w a' s. ' b '. '.e''.fl$ *.' ''th e . s e - t ' o bJ. - e cqti '#:. -' 's*?dt' 'tt' -'q.. ' 'to 'th v-kt 't*' ' '(,)* d ' e'j't 'adopted, y . . , . . . .. ,. .. . . . . . . .. . ., .. 2.r, ,rt .. ..wr..js . . . rk k . r.. i' ' ( ; ,

. . . . . . é ,. , g .. .: r o. ..o p. jj sjjy .jj, s-awr. A,u s.y. tjjjw ) jjy. e...' jtjuj j. j' sm gjjj . jt v. g,ja .ye- îr, .oom m,

-'ftm, ' eë. .liî.t' t1.. f the au thb rltles to thlj se. crljltlke û(Jm.. :p o,. . - . , . . ,j, , s.. . . , p .- ., . .... - ?u).'

' Ah'' e lack ci f p ri k ate cap 1 ta l . I n () rd ':.. r ztb m .'.'tt.t'gtp.à. ?t..e. the a-d 'v*elz.-s' e.. :1', **h1- p : '-aùw'-''*'4t's.' ' J''bs.- f . '-wz-th ':câ. Ij, d ' t . . .z . . . , , ''n.. . . $ v .: . . . . :im'2', 7:..1*m-. ' ë,' httatien of som e SAP. refonns on th e vultl. erdble- %oeial grottp' 'g K. tvtö-' .n: w.e-r. k- J;h 'l'tlat-çd'1/, ... ,. . ... - . .. -, c

...

. gk , y .. .... k . . . v.. .,.;. u ,. ..; sm.,l ' c - k 4+ lh. e sö c 1 a 1 d 1 m e ns 1 o n o f ad j tt s tme- n' t. T''xzh..k! 'e:î# à 1'ö. m'-fa lnlt-jy 'th! ë Frljg' Taltu' ? zue a ('lf .1:.to .m tegrate t . - , x . u ; ; y.x-' A .:. . . .

. ' ' : ' '. . s ' ' - ( : u . : t- ..!::. .1 yj-jjjj

.jb 'l'bNe.fid'-s-sm,lo. t1' a.;l r ectm verslon . d' raw ln2 up of cohpre'n' t aad-'. eïftfeuctlve. ' deve lspme. ht. strâêt, e csfeuss â'tt1tc wm'.i . . . . . - '7 u r. ,...,e1 i . . -. . *''' . *' . *' ' i ' '*-F ' 7 J 'F f-n Ganc. 1 ah Ng t V'ef 'k'h e@ltrh and 'e ducA't ion se rk lces .'r.; . .

' . . ..w 'Jt . . . . w j ) > +'. .z . gj . j4 .2.-2 '8' . The reâctlon 0'f the supply , fot- fts p 'art, wés we Jtk dtfe t'o t'h e st'Opyœ.mhtw.aflif/#-tx.rgld' ltty, ..1,., . .t .. ,, . . , . . v j, .e ru- , j.a.I à. .j-r-a.s. tlju-ii'e ''tu-âine..cl a'lm, ost -1.* tqt't-.st--ttjien..'''-tth', el.l-m--'k'-'J' k-'-l 'ior the.. B u, Frt,m.wd Ia, economy. . . -. . . . -,.- .-.. k-ry=. -':t,.

- . - . - . r: ' $ '

tk z . - r k - t ' '. j4 . m. . a c t of th e. resfrt'.j;- ntt. ! ' W a'A :. r/nzl' ' ' 'st t-atezd, b: 'y' th è- ' Jte.. k o:L*. e'm' $ ' fti .g 'J''-a gldfs' ' ' 'ec' U.HO. rltiy . lMVrc, 0 V e r , t e l P. . . . . y . . , , ..sy - - . g p,, .- .. . . .. . q . . , . q k. . ...#. J ' ' J ...... '

.f . w ' ' '>

'

# L * f . 1 e * .1 V F '( 1 1 ( ' el 1w J , . ..#.V ' & : X L ' 1. J. 4. jsu th, as., th.!.e.- f4.1. 1 lh th e p rtce of carjh c rops ahd. th 'e.. trvou. b2 l'led reg l'oh.avl e.tw lhtfo, n m't er nt . , T hvI '% tvqllelg-d '' ..:. y. g . *

'

@ e

'

@ . % ; #of etonofn le athd tinanclal lndlcators was mltlgated.

4 3 R' epq' rt'i n : antd Audit@

Nw

t. . . . . .. k . . . . z jytj tjj aj o outpary ' io t' 'hI ; 4. B. gpnk-r -' 's 11'stJ'y1j4 .' 3 . 1 The lnte. rnal aud lt report' On th. e SA# > revea. . . - . s .j. ., . t j.v,. a, a . ,- '- ' ' ) l ' d) a r-d, . c 1 atl. $ es t e,. 1 a 't. 1- n g to t h e S -. A 'P 7* 1' ttl' 'X 71 'ezhjre. mtailon trep: '.' (1 Adr'S. 'â' 'IX. d 2.91$ tl' ;1lt ?àt!t d' Jt' 'S fo2 'f111.' . 1e. -s ., . th ê. 3't.à,t,1. . - . .P. . . . . , u . ! . 4 o. . .s. - . - ...yy,. . . , .,. jy t.r ).+' dk ;,r k j6% igjk.;. ': : *. e .) j . ,.' . c y t. ' -. , ..3:6. zrh ' a .. .; . k ; o Njgigjjtj.. . . jjj. -y-.jjjj jyjj; jjjjjy gyjgjtj, jjtyj;, xjjjys jyjj;thr'é 1o. ah- .s Ac. ,c,r .(jY1t, ts wetre nbt meluded l n. the tw-tj : à'h Ag'y ree. ment'j' . Th' e. B a , j y.. f

, ,. .

.g y, . . . ,- . . ' -; - . . . ) -. :; kjh . j:'r .j - .:. j? tk/vk;.x , j . . . . ; . q . : . ( a . , .. . :. & kx sk ..Q!j , . .(j jsgj ojtjjjyjj jjty . ' .tjjz ûtxjj) vd jjjl ojj jxjhok jwhleh k,lmfe. .d1 B; uittt- kdl ln Apnl 1993, te-stlflè: d ttj th' e. slh' 4.prlaty an c v ... . . -

loâtij, *.hil'l'e.- popmtlh' g out non-conform ltles aqd de'tl. . . . . . . .& .

' 1 kriz. è.d'- .sâ,ft-.etwards . N' o auditi ng was carried' ou't by. ' tth, e Boru. tï, d .l' Au. .qtlh'.'br' ,''f-te.. s . lt,g-..u, g

î k' jk

'

i1

I

- .1 1 -

4.3.2 All the SAP implementation 'reports have been forwarded in fairly regularm anner by the Permanent Secretariat of the SAP M onitoring Conzm ittee. 'The quality of the

g ' .reports is satisfactory, hence enabling the iBarik to follow .up uthe SAP simplementation. n eBunmdi Authorities have not prepared a fttll cpmpletion report on the SAP 'financed by ADF;nevertheless, hsom e parts of the mport kave 'been prepared. Implementation completienreports on the three phases of the SAP .and an audit report on the performance of the 'firsttwo phases, as well as supervision rçports 'rhave been prepared in sutisfactory 'm anner b

.y theWorld Bank in its capacity as lead bank of the cofinanciers of the structural adjustmcnlprogrammes.

4.4 Procurement of .Goods 'and Ser#ices

4.4..1 The procurement procedures, which the Borrower shopld observe, have tbeenclearly defined .in the 'SAP appraisal report: international competitive 'bidding for contractsof UA 0.921 m illion or more, .intetnational shopping below UA 0.921 'm illion for theGovernment and public agencies, and usual trade practices for the private sector'. T. heimplemeptation of these kprocedures did inot pose any special 'pröblem . The internal auditing.carried out by the ADF has, .however, Lunveiled a few yrocurements emanating from non-eligible countries, which have subsequçntly Ebeen rçgularlzed, 'but not'expenditure rélating tononmeligible goods.

4,4.2 The supporting docùments 'refating to the use of proceeds .Uf the ADF loanswere mainly on tprivate sector imports, notàbly vehicles, materials, equipment and .sundryproducts. Owing to the simplicity and zthe well-defined nature gf th: trade Tractices gf 'theprivate sector, 'the apjlication of 'the rdles and (procedures 'for the 'precurèment required hasbeen eased. The main countries of ori.gin of imports are France, LBelgium and Japan.

4.5 Sources of 'Financing .and Disbursements

4.5. 1 The total amount o'f 'U A :168..421 lm illion from the two AD, 'F loans ''had to bedijbursed within two .years .and .dikkided killto stwe trandhes. A.s 'soen .as 'the .conditions èfortthedigbursement Uf each .tranche were ifulfilled, ADF had to .didburse into 'th e speciâl accountan amount notiexceedipg .50% gf teach .ttanèhe. 'The request for rmplenishment of the fundsgf the special account .could be :made as tsoon :as the balance fèll àbelow 50% of 'the initiàldçposit. At the 'sam e time, 'the Cborrower .could sapply the other ADF 'loan dijbursement'm ethods ,in force.

4..5.,2 The isources of finanéing of the xsecond phase of the structuràl 'aujustmentprogramme were the ''Wofld Barik, .lead bank, with SDR 64.9 million (second credit), .,J'qpanw ith Yen .2,4:0 million, G erfnany:r' 'M .10' ,million and Saudi Arabia: 11 m illionR iy. éls. T hesecond 'j'hase had to cover the qperiod from June 19.88 to Decemb' 'er 1989. The last tranche .of the ksecond credit of theLW orld Bank'was, nevertheless, not released 'until 1992 instea' d. .of

the hend of .1989, due to ,delqys in .the im/lementation of the measures hby th. e Governmeht.

4.5.3 The two ADF loans 'were 'fully dijbursed on 12 'M arch, 1.993 . This kshows adelay of nearly two months in the mobilization of the proceeds gf the loans, 'if one considers.the 'fact that the date scheduled 'for the last dijbursement is December 1992. The time lagbetween the application for disbursement sùbmitted by the borrower and 'the actual

t 7 U T' '5. à

(- 1 2 -

. e , .)bet

-wç-en the application for disbursement stl. bm, itrled b, y thzç. borroWèr and tlie' iathttt ,alx.. t . . j : . ! : . , -j $ . x. p*. aù1k.gj. ) j j. j . r' . .

.(y , )j, 1 j.' . j ,jjjjyjj ygy gjy jg j. jyyyjyjy-...jjjjjjj.j j-juytjjjjqy'jjyj.oyjj jj.y,.yjr;z jjyajjy, , j. ygj.;yyjdllbuxrsement by the B. ank was about t*o we. eksu .T! p,h.' e p roqed, urc fo, t, Jùst, q .. 4 ; . . i . . z>. 1 . . . f J z j z , . . ( z t:r ' . . i :.'v y j k :a%.

bf tlié working cap itàl before its renewala howeyw : took poime ti - 'rrig.. . ; , , : : . k .. j :

'

- , . s ..

.. . #. . , . . # f : k ....,r : j s. . . . - ; . .

.

. .: . j .yjj y ,j . .g y.4.5.4 à Re

j .gardlng the counterpa, rt fu nds 4 f the, two ADF lbans, $2 t, JBgkh; ' uxt de la. ..

.. . . - .:. . v ,, .. L'. . .. t..).. s

'

- ) . .' f .f . :: .1 . v . ;. . , I.j.-c''t.f- .Riouhlmue du Burundl (B. RB) paid thtm.fegurlarl. y into thq, T' rçysqry.. Theje. (eti qterpart.' . :'*,

. ,. 'v , ! 'j ..'œ

'

u ; . ,. . - t ; . .. . ' . . -

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. - . .:j. :1: , . I . , ) zz 'tj'''l 'f . . . ,f : ,j! ,. . . j r . . x t

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fuhds hak. e helped to hnance the lnvestmepxt andx) opèràting budge,vt. erxpetidltu fe.' z , 1 ,C kx .. 'K4

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V. INSTITUTION AL PERF' Ok,t..! . , '. AN. C E '. t

'

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ep utat'l-''Q'oI1'hph. J'as'e ' ' * ''' ' '' -i' '5.1 Proeramme Prk .

: . .

.,t. . ... . . t . o..u. . . . ,5

. 1 . 1 , The prenaration and implementai l'#,n' of thé f.. lkst fw d p'.'hé. .sès ef th g .'. SJAP h's'âd' / j

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q : s J ) . . k' . : ' k (: ;k t '*' ' j. - # : .) . 2 ','i .. ). tï :; . j ' .. . . . . ..: .. ( . î. . ,.#

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.. . . ' e . ; -,'. . , , ?jrecttlr. èd. a heavy lhxvolvement pf the servlcçug jpf th ., ey W pr,ld B.AI1k.. a

. n, ,d the jIM) , .x.,, '<:lhok) ew t)' f th. -;t. . 'K

.

. . ; 1 . . . j .. . , . . . . y p . . j yj. ) ) y ytj ) j ytj. .jy jj r jjyjj ju a e. y ...

.

s.

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ju a1o* âvàllab. llitv and the lack of ekpeneri-ce of' ,;B.tJnmd lâ'n profe-stkbrtal stà , . . , ,.:. . .) ' . œr ' : ' ' . .

œ' . , j r'. ' y . j . - . . s' . . x.. , .; . -) kjaxjj, j. . g I j ; . .;'.s'z ' i #' .' 1 . uproctâ. m' ., me. f lnanced. b.y A. D. F went (Jvqr cçrfaln mçénksll, j. e7,s p l'apwad l n Lthe. 1, ast jtdg'. p' #.f tk e. . *''''

, . . . '- . r k . z . , ''k qi 2 ..v.. . 4 ' -. . .p.t,ji.jt < . .1 . ..r ; n z. k , ..u - . 4 ,t. .t;jzl.i; t k ,.x k...second' . cm d. 1t. of the W orld Bank . Nevêft, 'h. elèss #. Jh elt; T arlk' . lyfi-tl/vè.hezd, ' àt thr ë tlni t. .îw,l1-#rï fth/'-e' . ' ' ' . : ; j,. : j j ' . . . : y , : . , . ; .a : ; j ! . x .- ). ' u j y ,j (

'

y . oiajij . : j. .. , ;.'n#tlttt' tmtlal framework put ln plaèe began to bé ö,p'' érâtionafl .' ln thij #e1,n' thp êrllljnm-dtlan1 . t . - ., . - , . j , . . . .. . . . , : ' . . .s. . a ) . y . . . . y . .y o ;j t j t $ ;. yj . j .(.jy .( y y . ,Gèkëtnmènt

, particularly th. e Petmatlent Sdctöfa/lat öf the. SAP .M prll,tùfl,l1eg' :. Cplln-, ijtee. àsld' ''

'- ' - i du Buru, ndi .p. ,-trt-lcl-.pz,ted in the d.

ra.w''''.iktql' '1-,1.. ' ' o'tf'--t,k'''veiz->'e-t ''. . -thè Bâhq. tz de la Republ que

, , g, p , . pl/giramm e. ,finâhtéd by the ADF. . :* . :

' c u j s jr j ; u jx j s. a , o , a j sj ë rj: . j.a u o me om 1 jj' l oi fl j éndl ,'vT :aCEmX ) éIVJS g i n th1 ! U

1 ,.5 .,,1 .2 Hbwever, tne zacw o. resxucz.xw xauvu . j., ,.u - -- .a r jj , . ...;w... (uj,;.. j. (j j; . . , j . y .r ,.q . . o , . gpy. . . . . j mms..k . jye . ., .. xsyjy s . jyjygysgjj,jj jyjyjyj,.d' tàwlhc up of the prucramme. Thls concem s part. lc. ulakfly labouf nollcv,' sttla po .' >-e 'r i .( % %-*n..'' '. A. , A -. ' - . . . - ' .A: f < : . . .A. e. .

'ttblit en' tem rises reform . ' 2, . p , ';

I5 2 M onitorihg M echanism :@

'

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) , 5,.2 .

. 1;s

. The SAP onltorlng Commlttee set

, pp, jn 1987 , ,ls thrtt: xecutlftzg. 4g.e.,,n,x.c#/ U,! t . ç. . . ..* . ) .4. g . k /1 ' o ) $ ' -' . .'..w il .jtm ctutâ

. 1 adlustmeht procrarnme . The nj qm; ' b ets ef th ls C(r).nj' 'ritlttee' àrqt'! yth, qikpr.fhii èj M, 81..-111.4) ?jt4t'.,..'ï ': i.. .#..a 1 *' .

'*' '.'''#' j.e ; . e e . t j 4. ' . : f y. 3.1..41 . yt q!. r' 71 r 1 ; . y . k . .J t 5 . -. ..i.G : v ' 't1% e ,M' im- ste. r o f F 1 na nc: . the M m.l ster o f Develp p: -!q.' en. t P 'lâifm ifnk C 'ah. d' ? * Re Rc dh '*s'. -'Ntruc. . *ti eeàt, thc :'

. .lr a . % . jk ''( t . j 6 . .. . ' . : ' : T & , a # : ' , v' j . *1 s.1. jtjg j..t â a. . .. i'jjy!g : .. r. : : , . s . gjlc:, : v. j rj j s te r o?f Ajlr itu 1 h/'f e= ! din: d' iA..Id' 1. .:1Mlizjjxte, t. of Ext. e rnâ l R'e Igt lo ns and C tl0, p è.. (atlö n' ,, t, . , . , , v j ...;j ,. ! j pyjyy j ui, y . . yyg jjyy-ju. j,( s. ' .' I . . , . . .)q ,e ,r ; . g .? ly . y . . . s jHj ttjbandry , the Ministef of Trade , Industrytàwd . T'puir. lsm , th, e M .mljter of ,m.. o r, ,(K. @. ... . . . : ! '<

'

. . . ' œ'j t J l ' , .; S *...C . . i 4 c k ' . E'q

'

- . i . . 4. : . . SI?E ç. . & . , $ . 'a. %.y*1 . . , ( $ 'T i'à

. lliinz. and Cotta 'ge Industry , the M irttst.' n-o. r' .

'of W otn e n ' à .prem, öt tötj , : ''W wt 'u,vfzt. ., â#,', 'R1 rghts àilkd. r. rg . . h-e.

o x-'.

. . . . . . . :. .

) , g 'qjjj . j y. jjy .,.( ; oy . . ë.yy.j.jkkj,r :, àzjl6onklKj 1. j . aSoclâl Actlon, the Governor of the' BRB, the Gellectal C (jjrà. Emidsj.tmèyrtbf th. e. SCà -,EJ P. t:k.' .-e

J . ; . . . , . . . jj j re f ovk6.m kf f l.. t4 Fj j 7 ;' k ; i, #. ' k '2. ) . A xPtlhcilpal Advlser at th. e Presldency of the Rëptlbljc relponsl . ! Eèontjï, tc,y Afja/llls.k, tke2 l J . - ; . . . @ . .. . l 41 v .. . lv ' '

'j..4. t...xe ykPylàd. 1p...é1. Advl&er to the Prlme Mlrilstçr r4 spoh. . lib-l' e 'fot Economtc Afifàlitjd ànd tlie ..PO r ! ! akeh't... . t . . s . : q . : : z , . 6 . (- ?; . .

Sectetariat of the SAP M onitoring Comm, ittèe' . '' .' . . ' f ' n' 1 # ;

. 7. . . J

. . . . . tt . , r l . ' plr t..x :4 > p. . x .t ,:z5.2..2 Thls Com mlttee is thv declsionnl-akf/g bodry .()t1 lj-stjes ofyèculigitl. lç rjfp' rm. .. i . . , , ; g L ? r . . j y 4 j : r v j t . r :1 ; j j- , /. , , .yy.y: $ Lo yjjjjjj . . jj ay y s, .yjjak ysju g. jIt sup ùtvkises and coordlnates th-e programflw - finptte: m' entaRlon. O as y a .. ., ., '' . .. ' .zk

. .. : .. . ,

. x lj ) , , y u a.j(:.j; y) . . . g,jj ..;! . 'jzlyuyjrjj jg. .j6àà3;. yy .:) . jjjtjjlljj;- .;jr.jk,. ;. q;r gjgj. . jjjytn:

.-et.zlkf)g' 9 ,1n ordet to: i) assess the progte.7s o. f th .è. rofô. rm tkbrcysë, 'tl),.d. l'leetem. :astldqç.s to-. .,talken' to prevent adverse ef fects , atl' d 'av' 'oid '.A$,-l1..I'ip',pafV,g.'

,e,s '; ) ii'l' prok*idett J z'Jcfeis'ki'' .j. 'L'yl ''.''tg' tk '''l.1'(la1k. c)lè' .yj) t1,; . .jjj. t ; , ( , : . i j; $ , ; jjjjjgr ..j ;. ,y ryzpqlicies tg be fonnplated and initiated jh. prd,.ett, 'to ob' tahiù .better t te. jutt' yi, 'âlnd. slv'lhl steet tlte**

0 X' y , ' ' ' . . : . .. zj ; . w t u, , qy (' . ' '. j . jj .lntèrnétiorializatiqn. with the various soclal pài't, netk.' . :

''': .. $ . . ' . . j '

t

k

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= ...x-..... .---,.w x 'u'X'..cwua 2',x.wh.-4' =.--.: u ...-.,.r.A ..x,.i' .axrauk'.*z2.*x'v..--u. ' 'kax'. .Q' + ,,1a.-- . kx;u . -a,

à ' ' jj

1&

- 13 -

5.2.3 The Permanent Secretariat supports the SAP Monitoring Committee in the day-to-day m onitoring of the reforms implementation. In so doing, it collects and analyses datawhich enable it to evaluate the impact of the reforms on the economy in order to clarify thedei.isions of tlie Monitoring Committee; it prepares the working documents fer the monthlymeetings of the M onitoring Committèe; it facilitates the programme monitoring for thedonors by .providing them regularly with data on the SAP and by supervising the m issionscarried out under the programme. The Pennanent Secretarigt coordinates the preparation anddevelopment of the Economiç and Financial Policy Framework Document (DCPEF). It Ctl' ,''coordinates the activities of the Burundi Entemrise Support and Training (BEST) projeetwhich is a technical assistance project and assists private entemrises in Bunlndi, financNed bythe USAID .

5.2.4 It consists of six monitoring units: i) the public resources management reform!monitoring unit; ii) the financial system reforms monitoring unit; iii) the real sector reformsmonitoring unit; iv) the external sector monitoring unit; v) the social dimension of structuraladjustment monitoring unit; and vi) the private sector reforms monitoring unit.

5.2.5 The refonns steering mechanism put in place became operational at the timeof the ADF operation. The experience gained by the different comm ittees in implementingprevious structural adjustment programmes became a useful asset in the implementation ofthe progiamme financed by ADF.

5.2.6 On the whulè, the borrower has implemented the refonns progranune in arelatively effective and satisfactory m anner. The m inisterial SAP M onitoring Com mittee in1991-1992* held montàly meetings regularly to consider the documents. The monitoringmechanism put in place has enabled the Comm ittee to form a general view collectikely andindividually, and to make an objective assessment of the reforms, t'hereby facilitating thecom mitment and consensus in relation to the SAP within the Government. The PermanentSecretariat served as ''coordinator-relay'' between the Ministerlal Monitoring Cornmittee andthe technical services of the administration responsible for m aking the reform s operational,as well as the private sector on the one hand, and between the M onitoring Cornm ittee andthe donors on the other hand. This monitoring organizatipn has helped to enhance coherencèand to limit slippages in the implementation of réformsk

5.2.7 Nevertheless, despite the monitoring m echapism , the internationglization of thereforms remained difficult. The Government, therefore, took note of the great importanceof the internationalization move, which will result in associating the various economicoperators w ith the preparation of the SAP 111. It should be noted that the monitoringm echanism emerged with the subsequent political transition and the socio-political events.

5.2.8 The Bank's internal audit mission responsible for verifying the correctim plem entation of the Loan Agreement, the truthfulness and regularity of the SAP accounts,drew the following conclusion: although the utilization of the proceeds of the loans m ay beconsidered to be true and normal, there have been some non-conformities, such as certainimports from non-eligible countries, and double repayments with other donors. Theseproblem s which retlected an inadequate knowledge of Bank procedures by the Banque de laRépublique du Burundi (BRB), were subsequently resolved. '

- 14 -. '

5.3 On-goitng Institutional Sup 'p. ol't.: ' j . .t . . '

j

. j;j j,ks, . jumoskjrtj yy.5' .3. 1 A Structural Adlustment,,pfogramm ' e. so tomplex as , t at. 1!, p ...':':

. hdi requires thé. strengthening of th. ècéun, tliy'sl 'l.nstitutio'nal eap, iàcy. ity. ,'.ic' onjigquxvjlttlyil' 'fhe'CCCZ ,. . . . . . . ; .; jèkp

. ef ience gained ' in ' t'he first two phasktj . zoif tlkectpioaœammo 'hâs vbéén vetav 'svaatu'able.. . 'v '''''' * '. ' ' *' . '''''' '' i O '-<

'

-1 ' .Howevet. the countr/'s ad. ministrativ: canèdeitvt reljil. aoili:y Idimitqd à'nd,ltlh. e ëindtitutiunkliesljlp, Ftjl-ts. . . .. ' *'

.â%'' *' . ' -11rS . 1 '

.'li àve' k.h, f ortu nately not 'always 'been availâb 'l.e 'iiràtlbqukate qiualky . a'rîd quéntity . .

:' . w. . .

' k . ''' . j' ;.. ;:' ' ' ' insltittltiotlv. lrtsupport p tojei intèflded fpïsttepxgjthen' 5.3.2 . The UNDP has financed an .

' > ical capàcities ef the p rofessibngl-staffof th't v'.ad. ministrationl aàukthe condjlltt ofrtllt'ethet tëe h'n, h 2 t u ; , , v; .pja ,y a, s,ecoùöm, iç smdies absolutely essential for the contçinuatibn of thr reforl. :s.. .

, . , k j yjihtemàtionalization actions, intended for tlte varlous econofnic opetators atfd çz k.

' ': . . . . 'f : . , ' ..rj! & jjàj'atl' lit. ilujtl-ation, were carried out with . .the w ppoce 0f;. the world-. Baljk k lhsuttjtio. . . ljuemt in ith. etkgenpivj iiw:tjlikxitiî i'ii tk' e.D. Ekelup. nie.nt Ftmd. The series of progzdss.pm'du ase. èiv q

. . . . .k . t .: U . C'.m-âtlàgement of the stmctural adj ustment. pcdgràm. . ni. re. . Nevertljkless, stnuçih tremajl-ns, tb be

' 'hli àsilts 'é',to.lhè, i'mliortarïeq Jf igtqmà. 'tifmà) tl' Wigften ofdori. e, h'èhce the third phqse has placed. emp . , z ..

, , ; . , y , j j o o ojj jr 1 q q a s n ytr . ju rthë tèfbfms. Unfortunately, the socio-political cffsès triggëred of . .-; . - - ' é

'

Wèakdtleds'institutiènal eapacity. !:N'

1. . . v !

.. . - . J rVl. ECONOM IC AND FINANCIAL .PERFO , ' ' AECE .

..; 1.

'

-6.1: M acroectmomic an.d- FinancikàtpR' 'tstiltg :'. ! t .

. . w * 1 . '. .6, 1 . 1 On the whole, the results p kf .tthe 'Stlw tural AdJ' ustmepti Brogràmm, en tbetWte, n. . . v. . , .. . . ,

. . , .

. .t . - , , . :- j - ..-..z- -,,. ) . .

.1991-1993 were mitigated. The risks idox. t'i.fi.tklti,iiy-tha: ap pràisul rept). llt. werrent.)t;j ,a' là. tguenè-x. tent'jujflted: these are uhstable wcrld coffee pticesj, ptot4cticipijbp. o.licieky'c) r, pl/y

. 1.X, . 'Zn-tidi-l*fit-èa tllttlés

' ' ing major tradingo paxn. ersj: u' .p.d thoi , weélkn . esis. r()tt- j 'k--'epà 'drrjiu ,'fli krifa-f' tive.oh th è pàrt of neighbour , . ,

uf ii ' f1. r the impilementation of cert. ai'n refbrvs.. 'Despite. canstralntji suçk.. .. ai. '. tXh' eY.zfàlll-' 'intapàc y .. ,. . a ! T + J ) .th

. ezjl'.iee è. f coffee and narrowing of th'e 'n. eigghbtmtihg markets. GD P.k 'reâl' growyvlliijyt, etwdq. >. ,. -

- . . -! . .. t, . . t! L:. .

5% , . i,n,.'199.1 and 2.7 % itl 1992, befere s'lumpingn tt'l a negativ: ralq ,e? f .5;7,,% ' i.lj !.'.1'9.9%k.i.à tk#$' i.i a.. ' ' '' - v ,.. !

'

' J 'i 'c 'e'trnteki. öf soci:-political crisis . This ecötlolpfic : g-j:kth 'frate 'is slli.gl.- tly htlgkqf. 'llhfz. ,*. 1.1t*. ' c k :. . . k ' . ' J -# '- . : '' - ?!; . z-;lr - :t .$d e% . b. grap h1c growth rate of 3 % per. year in :1 .99 tltï tbf-up nat l in 199 2 t'i 'Ph: GD. P,'7 pe.r çapltà

,. +'' . s ' '

decllnèd ''in 1993 in the context of the Burundiari, stjpio-poliitical crisij.. : : .@ i r

: . .. '6. 1 .2 ' On the contrary, . the public fintmce simation w/rse 't#.4 f 5, 'halzply! .i'r;t ls.grlilM. of

k i l ize publ' :i? e:' .p, end-itp. .K., reduce' 'lljt #. u. dgetqtyq Alxd.yfi.,i't and. ,gokernmeùtal effol'ts to rat ona r rj.ihtto. dtttz in place instrumènts for the 'manàgîve-enp ':f ekpenllitttre.là: fldrrgubliq ipy. .xç-s.tmêphts.î ' ' in the budgetary defid't ih.à% nOt been ' Vtksiqvçd. . . d:. e. ' . ht//atlllyâ to' 'i'rlieF.dbjeaive of fzduc g , : . a )ficient control of the rise in current spep d ing' . 'tlxe overall deflèitxbasic ctl.mm3. itmkftttsindu'f

' . . . ! . 'f . . . . k

and 'liolwg' bà'n, t$) rematned high, from 13.6% in 1990 to 12.4 % (jf G1D.-,P in 1991., 1..423% ltl. - . . !1992

, ahd 13.1% in 1993. ..; e' ..$ i ' . .

6 1 3 Concernin'g thè balance bf pay. ments, Ih'e curreat accoi.ttt defictij,zas. f'jejeçtâst,18 3 % of GD'P in 199 .1, 19:9% i'ku-tt'g' 92 ', amd 1993.. i T 'helz,è,xteràvayl-tfhli@.éqcifàllremàindd high ttt . .

e:f i't; n .!h' öwever, impcoved ,thanks to the urise in.pkuxternal aid in dgk-yïlwtfal .,amd- ett/dèfr' tk:'jituat , . .. .

r . f. ?jStrùctttràl Adlustm ent Programme in particul.àr. T 'h. ec'foreigll vxehange ptitlzp-tijmiwars .'j ble to

he average three months of imports ok er the period 1991-1' 993.cover oh t .:

'

- 1 5 -

6.1.4 However, the incentive measures aimed at diversifying exports and reducingthe country's dependency on a single export crop, namely coffee, have not yet produced theanticipated results. The objective of reducing the debt service ratio to 32 % has not beenachieved, as this ratio stood at 41.1% in 1992 and 40.90% in 1993.

6. 1.5 W ith regard to money and credit, the money stock grew at â m oderate rate,

i.e. , 11 .5% in 1991, 5.2% in 1992 and 7.4% in 1993, in contrast to the projected growthrates of 16.0% , 7.8 % and 8.0% , respectively under the programme. Credit to the econoyy .grew at a significant rate of 20.5% in 1991, 6.2% in 1992 and 29.1% in 1993, as agalhst11.7%, 16.5% and 15.8% set as an objective, respectively.

6. 1.6 The rate of intlation, which stood at around 6% between 1986 and 1990,climbed to nearly 9.5% for the 1991-1993 period. This increase was partly attributable tocurrency readjustments that took place.

6.2 Sectoral Results

6.2. 1 As for the agricultural sector, which accounts for 50% of GDP, 93*% of theking rural population and 80% of export earnings, it's production structure ' hàs notwor

changed and remains dominated by the subsistence economy. The food crop sub-sectorregistered a slow rate of growth of 2.3% in 1991 and 3.6% in 1992, before falling to 3%in 1993, due to the effects of the politico-ethnic upheavals of October 1993 which forced theaffected populations to abandon their lands and crops. The export èrop sub-sector hâsexperienced a much less favourable trend, exhiàiting a 0.1% increase ip 1991. followed by 'a 2.6% fall in 1992 and 12.4% in 1993*.

6.2.2 The industrial production increased by 7.8% in 1991 and by 8.7% in 1992,before declining by 2.9% in 1993 owing to the political upheavals. The tértiary sector wasalso less performant in 1993, with a rate of growth of 1. 1%, compared .t0 3.1% in 1991 ând1.6% in 1992, but was less affected, in relative terms, by the slowdown in activities.

6.3 Impact on Rezional Intezration

6.3. 1 The SAP did not include any particular measures on règiorial integration. .However, this aspect had always been of interest to the Burundi Government. .It is in thiscontext, that the authorities became concerned about the adverse effects, on Burundi'seconomy. of certain SAP measures implemented by the neighbouring countriej such asUganda and Rwanda, particularly with regard to the increase in transport cqsts for a smalllandlocked country such as Burundi. Thus, the Bu/undi Government m ade the internationaldonor com munity aware of the need to harmonize the proposed m easures in à concom itantm anner within the fram ework of the SAPS for the various neighbouring countries.

6.3.2 In 'addition, the Government of Burundi has always expressed its i'nterist in'the regional integration initiative, aimed at facilitating cross-border trade, settlements and'investments in East and Southern Africa. This initiative is jointly gponsored by the ADB,the W orld Bank, the European Union and the IM F. Several liberalization m easures wit.hrespect to trade and investment adopted in the context of the SAP had a favourable impacton intra-regional trade. It is to be noted that Burundi exports sbtne manufactured products,

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( . . . . .V'IIp SOCIAL , SULTS. ;

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lhftéstrttbvtv re fànd ltlcome gëneràtlng mlttrb' -.p rtjl, ects . 1-1t1 ad d' hltl4n, 1!t înttb. dtle ed ?.2a' p lA.g.J;, gm ' Tm' ' e-. L tê . . ' . . ' . ' 1 ; t,l . ! ' . . jjj ' S h . ..)jj.. jj74*'2 . W'j( ,e'f'' ''tofekssi eqâl rse. training . N 'everth. elçss the cçw. ç qlie. tmrtlt'è.'hl'e.k. 'em-ent%' ! l'n pth'tà'e à a* tèa- .'s ' tqmàm.4:4. :j..Ll s

&- 1 ., , .. î. ï:#t . : . . . v

.. ' . . .

' c .. . . )-. .. . ' . . 3 : L' .r a . r . z ., . . j.. , . -- , $,. ' .

'-: . 4.( l,j'it. j

'

;j ) v,-j.. ..y. t . . ' , j;. ) '.. .;.jl(,j.

y

.

, r.. : . .. ... : . . , . ,,.' v i .

'u f1'1.m. pqlytjn, t . . Tho- lmpgct! o. p aemp loymej nt -'h-s-'ak'%tb,/emn llmw-iliter..d Th e stsytlkatlyoay l t.oq' l 1. lsçlf .d-.j fk. qt. It:ttx'. .!t' - '' - : . . . . ' . - ' 'k . - ' .t.> .p. . . t ' .:1. : ! .j- z. k, . rt t i' ' . - -l' . j, a t ',lmp''

eti$4 s-.jg... llrlf lcantly , owl ng. to poor rejtt' ttl. frbzm the gttld les a. nd surveys lciàqrfed out rùlli.rd'-4tt. ' .:jr ' 1!: .1: . . . . : dr ,,( . 51fhè 'I) rbgrélùme . ' -,4..ki # y . .. ! . .. . .

! ;( '! . '1.t

j . '

)

, . . ' . . . , N ....-i. e .1<....f,o<Ax.- ' 9œ4. ..u $#.e. =.

7

5?111.

8. 1 Following the measures undertaken in the context of the programme financedby the ADF during the 1991-1993 period, the Government reform programme still neededto be continued and strengthened. In order to achieve the objective of improving publicresources management, the following actions are to be carried out: the plivatization of publicenterprises, the rationalization of expenditures in favour of priority requirements fordevelopment and the improvement in budget management. To reduce constraints to priviltcsector development, it is necessary to pursue the following: liberalization of the agriculturitlsector, in particular the coffee and tea sub-sectors and the transport sector; reform of thelegal and regulatory systems in order to curtail monopolies; and the application of the tariffand custom reforms so as to simplify and standardize tariffs and procedures. To reduce thecosts of adjustment and alleviate poverty, a social safety net and a more equitable and widercoverage in the provision of social services rem ain to be put in place.

- 17 -

SUSTAINABILITY OF THE PROGRAM M E'S ACHW VEM ENTS

8.2 Some of the accomplislzments are likely to be sustained in the long term .n us, progress made in the area of macroeconomic management intended to set competitiverates, reduce price protection and controls, is expected to have a positive im pact oncompetitiveness and the balancç of payments. The same applies for the progress achievedin improving the Iegal and regulatory framework for the private secto'r. Nevertheless,econom ic activity 'must regain momentum , with the return to peacep in order that theexpected supply response comes into play. Basically, the achievements of the SAP can besustained depending on whether the socio-political tensions are reduced. In this connection,the deterioration of the budgetary situation, owing to the socio-political crisis and the increasein the taxation of the coffee stabilization fund can be cited as examples.

8.3 Generally, the predom inant role of the State in the econom ic activity remainsstrong. The size of the public enterptisés sector has not dim inished in a significant way andits performance has not improved, save for a few exceptions. The management of publicfunds has not truly improved either. Tools for the prograrnming of government expendimreswere put in place, but they still have to be internalized, integrated intö the budgetary processand made binding in practice. W ith the crisis, the sectoral prograrnming units h ave virtuallystopped operating. The rapid staff rotation in government services has further aggravatedthe problem of internalization of the budgeta'ry programm ing instruments.

11(..

9.1

9. 1. 1 Overall, the Bank's performance and involvement were mitigated. The Bank'sintervention in the SAP was included in the proposed Iending programme for the 1988-1990period in the report on the ''Economic Prospects and Country Programming'' (EPCP).However, the preparation of this SAP did not take place, since the Bânk moved straight tothe appraisal phase. The matrix of the logical framework was not prep/red, which 1ed to theabsence of target dates as well as the lack of precision in formulating objectives, measuresand conditions, together with the expected results. Furthermore, ihe disbursement conditionsput more emphasis on the formal commitment (legal documents) instead of the execution.

PERFORM ANCE OF THE BANK AND-O-TH ER COFW U CIERS

Perform ance of the Bank

18 - .t. . r, .. 1. . #. JvT' hè' impb'rtant measures to be taken in order. to achipve tl%e oblectikej' wete tlot s'pè.l,llçd out.' ? it is ho. t possible t:. vèxify , with rig'',p. r1 'ànd, î.l'.nThe eéd. result of al1 these shortcomings is tkât

1, thèéetails, aI1 the aspects of the SAP'S 'fiknoYvpltn'elltlttrion. Thd'stt ipvrfvision *as ihàdfi equlte,j. . a ' l , .

e(). h' àider.mg that only o'he m id-term review ihiliésiùh wa: und b. ttakdh, evçn ' g.:. . , u ,j, . . ,j, . ..,. ,, ) . , r;;. sti p' p leineMted by a mission that particip-ated in the W otltl Bank s SAP 111*. ègotiàfibng'. The: .'

, ' blmpàc, .t .oif these missions has been p ositivé. ' t '. . .1 J'1 .1 ). 1. ' ;

. . .y . s . . j . yg x . g jj , j9. 1:.3 . ' : The Bank was zble to take p àttt in th. sttuctux4l ad Jfljtniyntl:, p ttm. eljjtj ,n c ose' k y , ; vlypu. jjya (to . tjy': ; jj tj jjts , g :xi p. y pykstj jyyjjyétj jyj'

. jgy ju s ,coéfd liiâtitj n with the W orld, ,Ba'nk, and '1rï; . ... .. . - u .. ! . . ; . .it. helêplê. tl. to mâintaiisn'. 'a link between the W'e'fld Bélnk!.' ' $ , S A L 11 â.li'tl I1, Jl i' b'y :e op tf ibbtiitp ttt the

. .,b. . - ! . . .. u : , .

ti: kt ' ' 3's gap fià' ancing .and supporting tho te.föfm. s. 'The ADB' . ak'dl .$l%)':Wb't'M lirgkk hadcö ry . . .' - feéd. tlto a elose eooperation to ens'ure the tsqdce. s'jfu' @ .l' im. .p7 lememtatit/hr èf thdJ':'.p--,:o..g'ZraW'mmç,ag . J. ,

' .. #

'

- ' ) . . ' ' : ' h ''W,lti4 hûwâr: done effectively thro. ugh t'hè kxchâihge of Jtt'tt/aents,, J'lipt:gttp. 4f vibièmœiésion:'

. . v. j . *

i j . . . ( f ) . .. .' $ ) ; jj X;'Q lg . jalid. :thè ADB s participation in the prepatatlon, àp. 'pfafj, .âlchahd' negljtpirâl' riclA; fô. 'B4hdaW. (jnld Badk.. a

'. . . i . 1 3. . . . . x j ., rjj' ' . ; ( jjgjy

zjj: jjy jjy jjyjj.wi.ejjgjgjjjjgty .,.jjyjjyj, jg;jSAL 111. The ADB was thus àble to gain' from. thc 'W ofld Bànk s exp erl4xlï,(+ 1. .

' ' the 'depth andhzq' 'tltâl'lity .élft.'its? gl1 pei,vision 'arîdG'fiiotin iitis è(). lïs'ullltâj 'f#.:. stru. cttaà'l A-dlustm eht loans,

Ii :. ''. ' ' '

h'lvê-ë:tglhg:fs w ith the cofinanciers . f k' : .

. '

'9. 1 .3 , Howèver, the ADF'S internâl' audit misliitm ' olhorved Xome, ikre, gullâitlhtilé. â'nd, : k . . , , , . y js t i t'' ry.j. tjyj y jug ; xs, g' ,jjjojjtâsbs öf nee' lllzente. suoh as non-comoliance with thezrules and d 0. tl , di$ . i

. W .%...z '#

'

'K ' ' ' ' ! '

Wère 'sle-hulkarized l 'i . .. g . .

' k ...

ù '942. Perfo. tmance of Oth' er 'Cofihant. lergi

. . .. t .9.2. 1 The W orld Bank plaved the' eol'e of le.ttd: matla'zer (p.bfi th' e eöfiinaneietj in kth.. e

. ZL *' - . *1' l .' 1'. ' . ,

' -

' .

'

context of the second p'hase of the SAP. lt prépared à comprèh'çhs. 1l'Vé 'progtcafyfm... . e öf. L . .:.. l . i ',. . :. 'f2.... . ..àpp

. ltcst p''ftltte rèfô. rm meâdttres .and cdrried o' ut al tko4l.te,sp'-,li) and göbd quàlffy jttp e'tvirsimn. It''held, cb. nsttltàtionj with th e cofinanciers *ho genèg . . k

I 2 .. .

' ,

'

'b% .:2.2 However, the audit catried'', ' ö' ut b-y 'the . W or,la'd. Balltk revd.. àled jomë. . s ..

. . .

y .y,z. , tj'jhortcôe-miltgzj such a: cotl. d.' itions thàt Were oftreh'. #lâfg'iu'o, too ntfms 'e.r:,ij:!',' an. 'd l'litï. t ptêi.bjit. . .$ -. -.:' ; .. . . . . ?jj..?'T,hè 'lm, fy-b*rtdht actions to b e undertakzn 'witlï thekveklëw '. ,v' 'achievingylke kijet ébjçktikt<. we.-tç. tl().t. '

. k . u. . g. .,. . 4, . ;) a . 7 . su . , .' , ''lh-dj-eâty.drlp. recisèly . Tlhe d'esign and prep-'ar:tikbilvo-f t'-hahe tfj 'ryt t%o 'SAP s y's, :'f?frded.' 'flidll P/kç il4.' rt -

2'. , . .

k , , tcgj aac t , (kyfk. 4 tk yi f, împlbm. e tlpktatitl nk , gkrj 'd 9p ârttûipâtion of . the Government, and 1ht. i: hàd àf'l 1 p . ..- . . . . . r ..' ' ' ' i' ' im ort reqtliremeàts were ovë.r-estint' ate'd Wk h' ''èh le'é t to theiliteoàhzatlon. Burund s p , l . .

stégget,itl. g bf dönors' disbursements over a longer period thlan envigéged.. . . .,.,j. , ., . % ) . j . ,

.; y.. 1 ' * .

I.

. . # . .X. CONCLUSIONS AND LESSO; JN S , ,.k

10 t' clmtlizsions ' '* j- , 4 ' .: : i

.' 10. 1 . 1 ..1 T'he regult: of the implemeh' tatidm of S A P refonnsk ttnfl lthèfl ikoltiiiea 9f ihey ; . , y u. msj sjsy. yj , Nmrsoètonomic âtid financial aggregatgj over!tk.z.p.eri:Ud..f99.1-19p3 wèlemo e: $

: : f libellàlizatimfi i#. th. e 'externàl secltot, 'ttàd. ezlàfid, ')*' ricçsj .-Wâ.j,.lAu(,%, particularly in the areas oàs' ,We1l âj thç in:titutioàal and regulatory framework foi the privàteysyctor. ' . .

t. . . j * '

?' ..<1 ' .xxk...ae' ,.. . .... - ... z.-u. ..w'' 'a:=.- . azt-ixtt. '. , r.i'.-'v.. ' ' ' . .' ' 'h ' . A' ' z . - -wr .

'x> Wl . .ya.j . xy

j ' $.

I10. 1.2 Nevertheless, Iess im presyive results were obtained with regard to the publicsector refonn, putting in place of the programm ing and public resource management tools

' j

' .

(PIP/PDP), and in the preparation and implementation of the social sector policy.

10. 1.3 The Bunmdi Authorities have become conscious of the fact that theim plem entatiön of econom ic reforms was imperative. The reform follow-up mechanism pufin place was operational. However, one of the important aspects of the SAP, namely, theinternalization of reforms did not always receive the required attention.

10. 1.4 The supply response remained; weak, however. Incentives introduced in theeconom y did not produce the expected effects, owing to the underlying inflexibility of theeconôm y and its Iow resistance capacity to external shocks.

10.2 Lessons

10.2. 1 The success of a structural adjustment programme depends on the stability andcommitment of the socio-political system: in Burundi, this important factor was favourablefor the period 1991-t992, up to the political transition 4nd then the eruption of the socio-Olitical crisis. 'P

10.2.2 The experience acquirèd by the monitoring services in the implementation of 'earlier programmes was a major asset in the execution Of the ADF-financed programme.

. '

10.2.3 TV internalization of the reforms, both at the level of the differentadm inistrative selwices as well' as the various economic operators is a k<y factor for thesuccess and the supervisipn of the Structural Adjustment Progfamme. This requires that alarge number of government officials and econom ic agents in the private and social sectorj.be trained and associated with decisions concerning the implementation of SAP measures.Technical assistance ought to focus on this aspect of internalization.

10.2.4 Certain aspects of the refonns programme which remained relatively vaguedid not register any significant progress. 'This concerns particularly the reform of the public 'entem rises, the formulation and implementation of a social policy. It is, therefore, necessaryto be m ore specific in the formulation of the measures and their implem entation schedule.

10.2.5 The close cooperation brtween ADF and the W orld Bank throughout the entireproject cycle had a pojitive impact on the follow-up of the SAP'S implementation. n us, theBank could both carry out its owri operation and coordinate closely with thç W orld Bank inits design and follow-up. The latter s'hared its documentation and experience and didassociate ADB to its own operation.

10.3

10.3. 1 The following recommendations derive from the 'lessons learned from theimplementation of Burundi's SAP during the 1991-1993 period.

Recomm endations

1 0* 3 3

, .r g.. . E' 'r:''': 'n'I . ' .' -''>5; . X W ' ': . L..

- 20 -I

. For the Bank Grouo

Pte. naration, and Apprai s..a.l .Ph, asa. - y . J .. ' p

' .

- nce 1- tj '. th- ,e fgl 10.. j'W. ' '-up.

of ''thi.s'''.S? 2,Ai ' P ,, the(1) Havinc acquired somç 42oe,..t4e!' ''

!iE!l. :5.-.1::.114:' ---'ësk 11.1.. ds)? 'k;l

--

1: (:1-. :5;.;:j/-. ,.:ip 12.,11,:---

lrq'rik, . - -:ji,. -.t1i- '-1: i(tj-.

'

-2:Etj-'.

''-.

1:- '-'t.1l-,--.'

:j,-,'' ,:!..i1t4,L. d:iL. -..,..,- ..-dk,. .-'1Iï-. ..'1f-t:,:. à3,3. 1:-.11- I-qkr di,:-1l :jk-- '- , ...1i:)l-. t2,:. .:gd..tp;, (!.; d:r,. -q,,s-.k:pg ,1(-:,13- , --,t; ,i).' !'

.

'-t'4:1l'-:.'7 -k q-l-spîg--!?!fl .(1-1t;--- Ii:.ï. . ,r Ir)'-- dër:. .: ,.

< .. t . . Ndjjt J C ' , .rè

. . p a rato çy. p h .a s e s-. ' Of . St-tA. , -?P',&; . 'l- .llelu d i hg. . tlh 'e ! : p. h qMq 'le ' . ,'Iên' *v. p-.. 1 #+1- , 11 g . th eP . . , x . . .

,. . .m

.... , j ,,, , yx, .j e xy. ...j , j, j , .f

o nnu l a t 1- o n o f th' e , ' ECC e (4 1% mit â'lld . F 1 Iii a n. c'. 4î,*I, 4P .p 11 *1 q. #' #. ; 1.. 'F. . , rî), .li1. r . e;j ïw. .. :#j 'J ' 'k) , P : J'ip-è. .r.. x . .. , x - ' w = 7 , . . . ... ., ..: . ' .- .t ,. ', XA ...: . ; ..rtl - .. w. a. . .w. .x. xvtr-!, k''r.u yj (j( E F P F P ) . T o t h 'a t r z 'le c t , c çj t? zru! ' l n â. L l o n w. l!. b' 'u x & n. ' xe 'î 1' , 1ur. :r ua u l,llc

: . vv- . tyu : jj, jjsjj '. zejy (j. o jj.j ajj ! jwl . . '.Ba: 'à nk': , p jjij'j j d j :). hrave ktbBa nk s'h. p ttl d b ,e. s 4- rueëbtjg. . ïtw#: . . . , .. . . 4 . ?, - - .,.. .

. , ...b ) , a. , . ,q.. ., z . . ' . . . . . ; j . . . . .. .,uy .( ) . .e a.nn4. l-. k. su. f fi c,le qt. ! rk. .s.e. u,. lke..' 4. N.z ...5 (y ,g's. ttô- rè. .ln. . . fo. r. t, ,'e . th. e., ; c j pp. 'a-/f-tjy - .0.. f , lt.s

% . . t . . ' . . . . ' ' '. % l , . - 7 q jî . ' - j*- - ' , . . km 1- sslofl, s In aterm-ws , mf e.x,p: k :g, .gsrl f'o. r. , . a. ,

'b,. e,, ,ttot. , td. :s, 1g..p. ( cq. ' p zâztlsy. .' .. lk/ yf, th, é.

%*. .' (jp. . . t - >G' '.programme

, by strlctly felluwllftg. the OperAtlong mgh. ual .. .,; . j .' ' . .; .

- - T the sm' do th 1- mpleln'.. 4.* tat 1 on' and . stl sté 1 n*b' .- 1- 1 it 'y . (kif' thî' e AS. .A'.'1' P(11) O ensure . . ,. . : ! . .k,. . ., .' i. . r .. j. jy. k. ,, ' jj utj ,qaajjy' atxj. ott:j o f ' ' .'jé.f' ' j -j;m, . , ,s; i! j-f' :' ' ' t..h, eemp h a s1S mu gt: . ib # .) TP; Jtt , opp . k c , . .. .. j , . . .. y; j ; . .. .y ,. . . . q!y ' . '- 'k , , . .'. ' :

ad' tmkmlstcatlve 'segvlceg .a, .s well, as tk '.+ p .rlvtaf-tkyse--vtokr-yâ,,pd.' ks-othl'âtlj' gtr:tlps.z . . '.

'. . ..

'.. .,

- al - c- ' -' ' ): . . * --K*-k 1g' ,' . ' u-- .. -Ef fiorts should br e madt e. ! t, :i1.',n, k' .(p .l.#e th .e p ap aliyvtlyhtan. d #.h! 4 . /. pç! (y wp' èsktjttàl.c . .

'. $ .. . 1 .!!k . ,! v c )j' ' t jr ktl ; :. ; 'llqlau u .'groups in th e preparatib n of eetmomlc 'rdfonp t pfbgyém. .m, .:$ y Ihhtough'j: . . . . ' . ? . . . . . : t - : tr t . .. . ..k ., .consultatlon meetlnes. Tech,rtlcal asslstance s'hould foctl' ! ofl. 'txh' tl's .a'sp ye t

. , . . . *''-' ' ' - '

.1 I .? '*-Of lnternalrlzatlon. ! , '

. j j q 1. . . ,(i 11) The Bank will héve to adopt a global and 'coheretnt ap. proa'ch. ' by

. . . . 4 . . ! .- . F - . :7 11: . -

supplemehting. the m a. crm-e. von' jim. pç, t,e.fèrm s. pfog' 'x'râmrm' e ?*46k 4à tn/-btfëIk 1:' dktr d;:r . ,. -lr-- .t. . .. ..-gjy-, j;#jj.'.-gk:;r- .,p. ---!jjy;

,.jjyjj;.:,.;.

jj. q- .jyyy. . gr;. .,4; ,; y

.

.j y :yjg. ,jrtjg.. :. : .a jjy-

- . :yj;, ;gy.-jj! .-

-

j jyrj. .pjk4y, yk;;j.-:yjg,.jjj;j.

,

;-,r;gjjj. pg-. ;- .0L-;j;.!14tj,rgjrjj. , jkjrè

-.' . yjryjgtlj. rjrely . ,. -f,jej.-v jjrr

.

.of sector loans and qp. elz , , , . ., .,, jg. y. . 2 r.)jt. - . . '.

-- . .--

... . . -s

. .- !,! -:dIpjl: j jj,.j:rj: . ;r.sooial effects of' âd', J?-'tt.stm' x'e.-nt , tht ..tJ *ughh? well tar. getë, dy p4 pgtpliy .*4. s ! k. .k ! àpokerty red uction.. , k

.j '

Im Ie. mentation and Foll ow-u 'p PC,h-' us-è. 'P . . . I

.. ; j : .' .. , .,! g ,. $ y ,.. -, i . , k@

'

, '' ' !, @

'

, * l . ,. @ * 't * * '.

*( 1) Th' e Bank. ' should, .. str. q.flg''. th t..h. .'lqts. laun. ch .! ng , aîh--d. k, skup,. eEryajjjqjn, .m- , ..,1 #. .slylcl11', :g. 's qRt .w . . J s. : . zyyj jy. . tyjj wjjjx u. ,; a,

j w jttj :. ' aj4' j jac c Ord â n. ce w. 1* tth th-' . e d hl-..r*. .0' ,t. IY # . S )1-,41/d. ..t) 11 t l t1C th k, (9.p. , :. f! tttlo, #,s . z:,a - ! ; y, j .. ,s x . . . x . . .. ./.. . . ' . , . - . , p.4 ' . # . . . . j s .e nv 1 s. age at least olilè: fn tsslglj k ,p, cerx.sp. m. pgtkir , , tso. zelilstiqv, q a, . :5..,. $0.11, tj l'.hu,pkx'! @.hd' . ..

rigotous follow-up of th e àp' p: lldâtion o.'f. the varlous lhèrstzres-'.ê' i K ' : ' ' 1 ' ' ' $ '$

f

'

j ' J ' ; . . #

'

w t. .

(1 l), ''.. t C. onrd- Inat. jon alnokl1- g ' d. Q.R...#IS4z. Q-.:$P) ,ç.C.Ia y ! j . ) . !. j ..vy. . ..u.. y..rsj. . . .; 4 . ,,o,s..: . zu, .; ;,.-;,w 1 l'1 need to be strength :..pe.d. dth: 1#. tiï, ug-h d 1 rqç, t ïà. lnd'' v' ksylste-xmj ttqe/èa .h: angs ,è (ju f' . . a j . . . . 3 4 . . ..

' jy .* ; Vjytjjj 0: wu ,: 1 nforrh. . ati on and d 'Qc: m @ltteat.klpgo . ,, . w. l/th th e v lewv'.,.rto !lit:1.,' ,p. èaye t, 4 .,

' . -

' ' -%d. t 1 o n .. , < 1,

' ' ': ' '- ' â 'up of the programme und-. :,r dönsl era. , q' '*' ''*'' . j

'

1 '

(i 1 1 ) An audit report on the u tkli zati on ()f the loaqppr-xo' c.se.e.d, 's '*1 llkn:ëd' te. bey r . . j . u ; . . ' , .. ... . !r) y ax . . , : ' (j oJj y. v. jj . ;. (j. . . joz; y j; jy (jjy e. j.m- y . k a j # ',carrled out ln a systematlc malmer aïz p, r . , : ,. . : . (i

Agreement. ) ;' . y

i

( x*'

lt' :; '

tiç

t .

- 2 1 -

For the Government

The Government's willingness to implement the SAP measures is evident,yven if the rate and degree of implementation of the measures have sometimesbeen inadequate. In the future, government efforts should be centred on thefollowing:

strengthening of administrativè capacities so as to better control andinternalize the tools for programme-based budgeting and econom icreform program mes;

(ii) broadening of the scope of consultation in the preparation andimplementatiön of the various components or meajures, by involvipgthe population, workers and employers' associàtions, with the view toincreasing the chances of the SAP'S success, in terms ofim plementation and results.

10.3.4

(iii) carrying out an in-depth study of the areas in which the reforms hada limited impact. such as the public entem rise reform and the social

dimension of adjustment.

C:îKAS/JISFIWOa-BUNDISAILPCR

Y Y

*'

ANNEX 1* . -%

l . z x . --, .! : C N >. . ..... . . . / x !. *

N Z ',î . . I@

. -

4J !. Buquxa1

. . p .K I C on d 0 . * . l/ - .:.c ,

1 $ - ,I N wa *. % KOBERO . i' *

., m v- u. : x . .11 11I 1.

''''' '' lZ''' ' ''''''

e jg - 'ï / . ' --= = '. . .

-. ; j fl ( *--F t # '

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ANNEX 4

CENTRAL GUVERNM ENT CONSOLIDATED OPERATIONSIN BW BILLION Ae AT Ee OF PERIOD

1991 1992 1993 1994 ( )

Revenues and grants 54.34 57.59 60.44 48.33Revenues 35.91 38.20 39.78 40.07Fiscal Revenues 31 .61 32.79 33.98 37.80Taxes including: gn revenu 8.52 8.95 10.62 8.74Taxes on transactlons 7.93 6.95 6.75 6.78Exercise taxes 6.33 7.89 8.54 10. 17Import Taxes 7.99 7. 14 6.89 5.76Non tax revenues 4.30 5.4 1 5.80 2.27

Total expenditure 50.62 59.93 69.02 63.72po erating expenses 30.76 33.45 39. 15 42.89f which : Salary 14.29 14.76 16.28 17.51oGoods and Servlces 7.53 7.96 8.39 10.08Transfers and subsidies 4.63 6.62 5.17 5.59Debt interests 3.31 4. l 1 3.70 3.25

Othcr expenses 1 .00 0.00 5.61 6.47

capital expenditure 19.86 26.48 29.87 20.82

b lance (gxcluding grants) 5. 15 4.74 0.63 (2.j2)Current acurrent balance (lncluding grants) 23.55 24. 14 21.29 5.44Overall balance (excluding grants) (14.71) (21.74) (29.24) (23.65)overall balancc (including grants) (3.69) (2.35) (8.58) (15.38)

Source: Burundi Govem ment.

. .7 >.1 ; .k ' .. I11

ANNEX 5

BALV CE OF yAYMEM 'S(111 IJEI rlllllitl Il)

1991 1992 1993 1994 1995

Estimates

Ex ons FOB) 90.3 77.4 72.9 123.6 116.0

includin Coffee (72.6) (48.5) (47.0) (99.7) tit'! .6)I orts FOB - 195.9 - 181.8 - 172.0 - 203.4 - 2015 2

Trade balance - 105.6 - 104.3 - 99.0 - 79.8 ' - 93.2

Net services - 122.6 - 126.8 - 107.5 - 1 18.4 - 110.0

Ri te transfers (Net) 13.2 12.8 17.4 23.6 25.2va

Public transfers Net) 185.4 167.7 163.5 165.7 191.3

Current balance (excludin rants) - 215.0 - 218.4 - 189. 1 - 174.7 - 204.6

Current balance (includin rants) - 29.6 - 50.7 - 25.6 - 9.0 13.3Net ca ital tlows 55.3 64. 1 25.4 52.7 - 3.4

Errors and omissions - 4.2 - 27.4 - 22. 1 25.2 - 35.7,

'

Overall balance . 25.7 13.4 - 0.2 43.7 - 9.9

Financin - 25.7 - 13.4 0.2 - 43.7 - 9.9

Net forei assets - 25.7 - 13.4 0.2 - 47.9 - 15. l

Arrears variations 0 0 0 4.1 5.2

Financin a 0 0 0 0 0

Source: Burundi Govem ment.

. .& .

' . . . ' .

' . . .

SOURCES OF INFGRV ATIOXCIKOR, $f HEZA ERORT: :

I .

tAlmek 6!l

1.

(;!r. ..

3,

4.

5.

6

8.

9.

10.

.!

a.,> .-P. tesident's Mefnorandum on the Supplementâry Lganzfor'the SAP,':May -1#' 9i1;

i.e

> .è...

Monitoring reports pn SAP (quartçrly apd apjtual) fpr th. ç fi. havci,al .#'çW.#j 4:994 , 1-992 !,'i: .

1993 and 1994, Pennanent Secretariat dn the Monitorinc of #AP).' 'G g

' Republic of Bunmd. i, ljt-ljemb:e'r.'..l-gg3. tInternal audit rèport on sAP of thè .j -Implementation rp ort on the prog

. ramme finqpced by the Third StructuralrAdjul Fsment.

j5 ' ) ' 'Loan, October 19 .t

:

t d he Tliit )' 'XA.'LCompletion report on the First and Second SALS (June 199 ) an y.t .! ' k.

e-,lbecember 1995), Wofld Bank.

- : 1à1 Adjusiieùt' ' gnj:Performance Auàit Report on the First' and Sçcond tructur , , ,4

W orld Bank, June 1992.'

j

Documents on the ùegotiations for the T. hird Structural Adjpstment Loank' WorldBank, April 1992. i

tPreparatory documents for SAP, Permanent Secretariat of ' thè SAP Möhito/ithg.

Comm ittee, April 1996.

SAP supervision m ission, April ând Iune 1992.

1E.

8 rt - SA# - September 19*90.Atppraisal R l?o

11 .

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