Residents in Bujumbura, the capital city of Burundi, are expressing their dissatisfaction with the recent introduction of 5,000 and 10,000 Burundian franc currency notes. The issuance of these new notes has faced criticism due to the difficulties faced by individuals in exchanging their old currency, especially after the June deadline.
According to Faustin Ndikumana, an economist and president of the PARCEM think tank, the introduction of these new banknotes marks the government’s initial steps toward implementing reforms and raising awareness to challenge the cultural conservatism deeply rooted in Burundian society. Ndikumana explains that in Burundian culture, individuals tend to prefer keeping their wealth at home rather than depositing it in financial institutions.
However, this viewpoint finds little support among the general public. Many people in the marketplaces struggle with trade due to the unavailability of new currency notes. Chantal Mugisha, a merchant at the COTEBU market, emphasizes the challenges faced by individuals without bank accounts, as their old bills cannot be replaced. She highlights the impossibility of opening bank accounts when individuals lack the means to make deposits.
The newly introduced denominations, valued at $1.77 U.S. and $3.54 U.S. respectively, are the highest currency values among the six denominations in circulation in Burundi. This is notable considering the country’s per capita GDP stands at $270.
The Bank of the Republic of Burundi justifies this move by pointing to the increase in circulation within the “informal circuit,” which has led to instability in financial institutions’ operations. In its press release, the bank also acknowledges the shortage of these currency notes in banks, further exacerbating the situation.
All 5,000- and 10,000-franc notes issued on or before July 4, 2018, were withdrawn from circulation on June 7 and replaced with new notes dated November 7, 2022. Holders of the old notes were given a ten-day grace period, expiring on June 17, to deposit their old currency into their bank accounts or open new accounts if required. After June 17, the old notes ceased to be legal tender.
To address the situation, the Bank of Burundi has imposed additional restrictions, limiting individual cash deposits to a maximum of 10 million francs ($3,543) per day and per account, while legal entities are restricted to 30 million francs. Moreover, the apex bank has announced plans to dispatch agents to rural areas to facilitate the currency exchange process.
