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Econometric analysis of the impact of the exchange rate on the fiscal revenues in Burundi, 1984.01-1997.12

Alain-Désiré NIMUBONA student laureate
adnimubona@yahoo.fr

°1975 Burundi
Licence in economical and administrative sciences, Université du Burundi, 1998

Analyse économétrique de l'impact de la dévaluation du taux de change sur les recettes fiscales au Burundi, 1984.01 - 1997.12

Structural adjustement programmes for developing countries aim at improving their trade balance, which is necessary to service the high foreign debt. By bringing down the public expenditure combined with a large devaluation of the domestic currency, this policy has had - and still has - a considerable impact on economic systems as well as on the well being of the populations.
The originality of the author is to evaluate the situation through the tax system. After a systematic study of the national budgets, he applied econometric instruments in order to evaluate the impact of devaluation on tax revenue in Burundi. He thus demonstrates that a substantial improvement of the trade balance is uncertain when the development of a country depends on unavoidable and often incompressible import of goods while the national exports show very little elasticity to devaluation of the currency. In order to compensate this, the increase of tax should be equivalent to the devaluation, but this is not justifiable.
Through this study, conducted with lucidity, methodology and objectiveness, the author contributes in an important way to the understanding of many African economies and to debates about their future.