Burundi’s Central Bank (BRB) urged citizens to use electronic transactions to reduce cash transactions. The cashless payment system is said to be secure, reliable and prevent money laundering
“To prevent inflation, the Bank of the Republic of Burundi (BRB) is doing a close follow up of the amount of bank notes in circulation regarding the economy of the country,” read the statement from the Central Bank.
BRB indicated that it is better for the country to use more cashless settlement systems, several national and international sources have been critical on the Illicit Financial Flows from Burundi.
The United Nations Conference on Trade And Development (UNCTAD) 2020 report, describes a practice of systemic under-invoicing of exports from Burundi by companies.
And that this practice causes the equivalent of 5% of its GDP (Gross Domestic Product) to be lost.
“In 2018, countries where under-invoicing of commodity exports was particularly high, such as Angola, Benin and Burundi, also had poor environmental performance. Consider an under-invoicing rate of approximately 2% of GDP out of a total of 3.5% of total GDP,” a report reads from the UNCTAD.
In 2019, Professor Léonce Ndikumana, Dean of the Department of Economics at the University of Massachusetts in the United States indicated that Burundi lost $5.1 billion in capital flight from 1985 to 2015.
“The numbers are staggering. This bleeding is estimated at 10.5% of its current Gross Domestic Product and 149% of its investment. A colossal hemorrhage of capital,” he added.
In 2021 the United Nations report on economic governance shows that Burundi records a loss of 19% of total public revenue. Though it has a positive side on macroeconomics, the move said to be a walfare to the majority of Burundians due to taxes.
“They are encouraging us to use these electronic transactions yet we are facing several disadvantages due to the taxes and amount of money we want to send. For instance, the smallest amount we can send is a 1,000 BIF. We have to add 600 BIF to help the concerned people withdraw their 1,000. This is not benefiting us at all,” Gaella Niteka deplores.
” Another question is how are we going to pay the bus ticket from Kamenge to City Centre when the bus ticket is 600 BIF yet the only smallest amount to pay using Lumicash is 1,000?” she added.
Ms. Niteka urged the government to review the policy as high taxation is still a barrier for the cashless settlement system.
As of the 2022 by the International transparency rankings'( Corruption Perceptions Index), Burundi is among the most corrupt countries. Out of 180 countries and territories, Burundi has 83 points out of 100 and holds a 171st position.